A new United Nations report on Tuesday called for the creation of a new global reserve currency to replace the U.S. dollar as the single major reserve currency. "A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency," said the report, titled World Economic and Social Survey 2010: Retooling Global Development. "The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency," it said. - source: Xinhua
Dollar Alternatives The dollar has maintained its position as the dominant unit of exchange primarily because virtually all oil worldwide is traded in federal reserve notes (U.S. dollars). But with Russia, Iran, Venezuela, and other nations with tense U.S. relationships becoming ever more powerful in the energy exporting sector, that could easily change. Quickly. "We are making plans for the future. We are talking about creating other reserve currencies, and we are counting on other countries to understand this,†Medvedev told an economic forum in St. Petersburg late last week. “Even the use of two currencies as strong as the euro and dollar will not insure the world against problems," he added, promoting the Russian ruble as another potential alternative. News reports claimed Russia was selling U.S. Treasury bonds and diversifying its currency reserves to be less U.S. dollar heavy. According to CNN, in just the first quarter of 2010, Russia purchased over 25 metric tons of gold. China also backed a plan to use SDRs as a world currency to replace the U.S. dollar. In an essay published last year, the Chinese central bank chief promoted the idea that the IMF should issue the planet’s reserve assets. There was surprisingly little opposition, even from U.S. officials. Meanwhile, gold is soaring to record heights as investors, governments, and central banks seek a safe haven from battered fiat currencies. An analysis by The Daily Bell, a free-market media outlet that promotes Austrian economics, concluded that gold was “likely becoming a defacto, secondary reserve currency.†The metal is currently hovering above $1,200 per ounce.
The American government cannot just let it pass. They have to do something about it or its economy is doomed.
People have been trying to replace the dollar for years. I don't think it's going to happen soon, as even the Iranians are buying USD right now. I don't think there's a major risk, unless we let inflation get out of control. The hockey stick chart of growth in the monetary base causes me to worry a lot about hyperinflation, but if that happens we'll have even worse problems.
That hockey stick chart was brought to you by following the philosophy of Mr. Keynes. The one world currency, brought to you by the same man. Coincidence? Starts to sound like a question of the chicken and the egg. Jesus, I'm starting to sound like blogmaster.
I feel your pain man. I am trying my hardest to explain the Obama administration's response to the Deepwater Horizon oil spill without resorting to conspiracy theories -- and it isn't working.
Its hard to explain the Deepwater Horizon response, even WITH conspiracy theories. My vote goes to incompetence. By the way, the poll numbers showing people abandoning Obama of recent are not Independents and Conservatives. The last of them bailed on the Healthcare debacle. The people he is loosing right now are the left, including some hard left environmentalists. It won't be too long before his only remaining supporters will be the black caucus, who will never abandon him, no matter what he does.
I don't think that will happen, the Chinese are very strong, and my opinion is 20 years they may have worlds standard money as their own?
May not be, the Chinese do not have a well developed money market to be a contender. Twenty years down the road, it may partially replace the USD but I doubt the USD can be gone so soon. One important factor is that there will be another 20 years of peace and growth for China. Something I doubt very much. IMHO China has already reached its peak in terms of economic growth, it has vast social inequality issues and it needs to give more political powers back to the masses. Al these aren't easy to handle within a communist regime.
I agree with the bulk of your post, though I got a chuckle out of this particular quote. In some ways, China practices a more purist form of capitalism than the US. As far as China's potential, it is practically unlimited. Yes, they are destined to hit some very large bumps in the road to world dominance, just as Japan did, but over a billion potential consumers within their country alone means a lot of potential.
If I look at per capita GDP, China doesn't appear to be that advanced. Luxembourg 104512 Norway 79085 Qatar 68872 Switzerland 67560 Denmark 56115 Ireland 51356 Netherlands 48223 United Arab Emirates 46857 United States 46381 Austria 45989 Australia 45587 Finland 44492 Sweden 43986 Belgium 43533 France 42747 Germany 40875 Japan 39731 Canada 39669 Iceland 37977 Singapore 37293 Italy 35435 United Kingdom 35334 Spain 31946 Kuwait 31482 Hong Kong 29826 Greece 29635 Cyprus 29620 New Zealand 27259 Israel 26797 Brunei 26325 Slovenia 24417 Bahamas, The 21529 Portugal 21408 Bahrain 19455 Malta 19111 Czech Republic 18557 Oman 18013 Korea, South 17074 China, Republic of (Taiwan) 16392 Slovakia 16282 Trinidad and Tobago 15581 Saudi Arabia 14486 Estonia 14267 Croatia 14243 Antigua and Barbuda 13852 Barbados 13003 Hungary 12927 Venezuela 11789 Latvia 11607 Poland 11288 Lithuania 11172 Saint Kitts and Nevis 10315 Equatorial Guinea[4] 9580 Libya 9529 Chile 9525 Uruguay 9426 Seychelles 8973 Turkey 8723 Lebanon 8707 Russia 8694 Brazil 8220 Mexico 8135 Argentina 7726 Romania 7542 Gabon 7468 Panama 7133 Kazakhstan 7019 Malaysia 6897 Mauritius 6838 Botswana 6407 Costa Rica 6345 Bulgaria 6223 Grenada 5969 South Africa 5824 Serbia 5809 Suriname 5676 Saint Lucia 5671 Saint Vincent and the Grenadines 5291 Dominican Republic 5176 Belarus 5166 Colombia 5087 Dominica 4949 Azerbaijan 4807 Namibia 4543 Macedonia, Republic of 4482 Iran 4460 Jamaica 4390 Peru 4356 Bosnia and Herzegovina 4279 Ecuador 4059 Belize 4045 Algeria 4027 Angola 3972 Thailand 3940 Maldives 3932 Tunisia 3852 Jordan 3829 Albania 3825 China, People's Republic of 3678 El Salvador 3623 Fiji 3464 Cape Verde 3445 Turkmenistan 3242 Samoa 3078 Tonga 3032 Swaziland 2907 Morocco 2865 Armenia 2668 Guatemala 2662 Vanuatu 2636 Guyana 2629 Syria 2579 Ukraine 2542 Congo, Republic of the 2538 Egypt 2450 Georgia 2448 Paraguay 2337 Indonesia 2329 Iraq 2108 Sri Lanka 2041 Bhutan 1881 Honduras 1823 Philippines 1746 Bolivia 1724 Mongolia 1560 Moldova 1514 Sudan 1398 Djibouti 1304 Kiribati 1304 Papua New Guinea 1247 Solomon Islands 1223 Uzbekistan 1176 São Tomé and PrÃncipe 1174 Nigeria 1142 Cameroon 1115 Zambia 1086 Yemen 1061 Vietnam 1060 Côte d'Ivoire 1052 India 1031 Pakistan 1017 Senegal 994 Mauritania 975 Nicaragua 972 Kenya 912 Laos 878 Kyrgyzstan 851 Comoros 799 Cambodia 775 Tajikistan 767 Haiti 733 Benin 711 Chad 687 Ghana 671 Mali 656 Lesotho 642 Bangladesh 574 Burkina Faso 564 Tanzania 551 Timor-Leste 543 Rwanda 536 Guinea-Bissau 513 Afghanistan 486 Uganda 474 Mozambique 465 Burma 459 Nepal 452 Central African Republic 447 Gambia, The 440 Togo 422 Guinea 414 Madagascar 412 Ethiopia 390 Zimbabwe 375 Niger 371 Eritrea 363 Malawi 328 Sierra Leone 311 Liberia 239 Congo, Democratic Republic of the 171 Burundi 163 If Mao had lost the civil war, the Chinese per-capita GDP would look a lot more like Taiwan's: 16,392.