Call For Global Currency Expected At G20 Conference
The embattled US dollar is expected to come under scrutiny at a summit of developing and industrialized nations following China-led calls to review its role as a reserve currency.
The dollar issue is bound to surface at the two-day meeting in Pittsburgh as US President Barack Obama and other leaders of the Group of 20 economies debate a new framework for tackling the so called global “economic imbalances” blamed for fuelling the latest financial crisis.
“Though not clear how the plan would be enforced, it would involve measures such as the US cutting its deficits and saving more, China reducing its reliance on exports and Europe making structural changes to boost business investment,” analysts at French bank Societe Generale said in a report.
Some argue that the financial crisis resulted from imbalances between savings and investment in major economies, which have led to large current deficits, as evident in the United States, and surpluses, as enjoyed by China.
U.S. Pushes For New Economic World Order at G20
The United States will urge world leaders this week to launch a new push in November to rebalance the world economy, but there are doubts national governments will bow to external advice.
A document outlining the U.S. position ahead of the September 24-25 Group of 20 summit in Pittsburgh said exporters, which include China, Germany and Japan, should consume more, while debtors like the United States ought to boost savings.
“The world will face anemic growth if adjustments in one part of the global economy are not matched by offsetting adjustments in other parts,” said the document, which was obtained by Reuters on Monday.
The framework drafted by U.S. policy makers foresaw analysis of G20 members’ economic policies by the International Monetary Fund to figure out if they were consistent with better balanced growth.
“We call on our finance ministers to launch the new framework by November,” the document said, signaling a determined effort to maintain momentum for change created by last year’s global financial crisis.
World Moves Towards United Future World Currency
July 12, 2009 by admin
Filed under new world order
Russian President Dmitry Medvedev illustrated his call for a supranational currency to replace the dollar by pulling from his pocket a sample coin of a “united future world currency.”
“Here it is,” Medvedev told reporters today in L’Aquila, Italy, after a summit of the Group of Eight nations. “You can see it and touch it.”
The coin, which bears the words “unity in diversity,” was minted in Belgium and presented to the heads of G-8 delegations, Medvedev said.
The question of a supranational currency “concerns everyone now, even the mints,” Medvedev said. The test coin “means they’re getting ready. I think it’s a good sign that we understand how interdependent we are.”
Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the U.S. dollar’s future as a global reserve currency. Russia’s proposals for the G-20 meeting in London in April included the creation of a supranational currency.
via Medvedev Shows Off Sample Coin of New ‘World Currency’ at G-8 – Bloomberg.com.
A little history on the coin
The world in a coin. This is our vision, our hope. It is a necessity and a challenge. What seems an impossible dream becomes an inevitable historic, economic and social process. It is an event which is intertwined with the fate of human evolution.
A single currency becomes the premise for an increasingly global planet. A virtual currency capable of speaking a single, comprehensible language to foster humankind’s innate desire to go farther, to surpass boundaries, and move towards true principles of peace, freedom, brotherhood and understanding beyond issues of race, political and religious beliefs and party interests.
We are presenting the peoples of nations, governments, institutions, intellectuals, ordinary people, pragmatists and idealists, scholars and, above all, young people – the real protagonists of the future – with a simple, ingenuous yet determined long-term vision for building an ideal bridge with tomorrow and interpreting a dream to transform into reality.
In this program, currency yet again assumes the principle goal which it has had since its invention centuries ago: to facilitate and codify human commercial and social exchange. And become a form of pure “communication” between different peoples – a communication of ideas, ideals, information and culture. This constitutes progress, development and well being.
Dollar Declines As Nations Mull Supranational Currency
The dollar weakened beyond $1.43 against the euro for the first time in 2009 on bets record U.S. borrowing will undermine the greenback, prompting nations to consider alternatives to the world’s main reserve currency.
The euro gained for a fourth day versus the dollar as the Russian government said emerging-market leaders may discuss the idea of a supranational currency. The pound rose to the highest level since October and the Canadian dollar traded near an eight-month high on speculation signs of a recovery in U.S. and U.K. housing will spur higher-yield demand.
“There’s been a lot of talk out of Russia about a new global currency, and that’s contributing toward this latest bout of dollar weakness,” said Henrik Gullberg, a currency strategist in London at Deutsche Bank AG, the world’s largest currency trader. “These latest comments are just adding to the general dollar weakness we’ve seen recently.”
Russia Backs Return to Gold Standard
Mr Dvorkevich said it was “logical” that the new currency should include the rouble and the yuan, adding that “we could also think about more effective use of gold in this system”.
The Gold Standard was the anchor of world finance in the 19th Century but began breaking down during the First World War as governments engaged in unprecedented spending. It collapsed in the 1930s when the British Empire, the US, and France all abandoned their parities.
It was revived as part of fixed dollar system until US inflation caused by the Vietnam War and “Great Society” social spending forced President Richard Nixon to close the gold window in 1971.
The world’s fiat paper currencies have lacked any external anchor ever since. It is widely argued that the financial excesses and extreme debt leverage of the last quarter century would have been impossible – or less likely – under the discipline of gold.
Russia is a major gold producer with large untapped reserves of ore so it has a clear interest in promoting the idea. The Kremlin has already instructed the central bank of gradually raise the gold share of foreign reserves to 10pc.
UN Panel Welcomes Debate Over New Global Reserve Currency
March 26, 2009 by admin
Filed under Stories Of Interest
Editors Note - For those keeping score… This makes it 3. Russia, China and now the UN have each announced advocating a move to a global currency at the upcoming G20 conference.
The head of a United Nations expert panel discussing solutions to the financial crisis on Thursday welcomed the debate over a new global reserve currency and said it would be best managed by a brand new institution.
Just days ahead of the Group of 20 heads of state meeting in London, several key players have weighed in with solutions to resolve the current financial crisis and to prevent future recurrences. One of the most sensitive subjects is the creation of a new de facto global reserve currency to replace the U.S. dollar.
The debate has shot to the forefront as officials from Russia and China have spoken up, lending weight to the discussions. While the G20 meeting isn’t expected to address it directly, it’s a topic that will continue to be discussed over the longer term.
The U.N. panel’s report published last week said a new global reserve system would “contribute to economic stability and equity,” and would reduce the deflationary effects of the massive reserve accumulations that countries have found necessary to protect them against the high level of global instability.
The International Monetary Fund is often cited as the most obvious choice to run a global reserve system, as it already uses its own currency, known as special drawing rights, or SDRs, in its dealings with member countries.
Joseph Stiglitz, economist and head of the U.N. panel, said Thursday in a teleconference with journalists that, although the IMF might be the fastest route, there’s a stigma associated with it among some developing countries, and there’s also frustration with the way that SDRs are allocated.
“My own longer-term preference is to create a new institution to do this,” Stiglitz said. “That’s a trade-off. I would rather face up to these deeper questions and get the system right.”
via Article – WSJ.com.
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One World Financial System – One World Currency Is The End Game
Glenn Beck urges America to, “wake up now!” “There is a global meltdown coming. It is global depression. And one world currency and one world financial system is the endgame.” Glenn Beck Says, “China said last week they want one global currency. France said yesterday … they want one world order – a new world order at the end of this event. Read more
US On Brink of Financial Meltdown?
Last Thursday, the top economic policymakers in the United States told congressional leaders that the financial system was only days away from a catastrophic failure — and that the only hope was an immediate, massive government bailout. Congress agreed in principle, buoying financial markets. But five days later, the specifics of the rescue legislation remain undecided. Two of yesterday’s market events — a 372-point drop in the Dow Jones industrial average and a $16-per-barrel jump in the price of oil — show just how rapidly the clock is ticking.
From The NY Times
It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.
Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.
“When you listened to him describe it you gulped,” said Senator Charles E. Schumer, Democrat of New York.
As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”
Mr. Schumer added, “History was sort of hanging over it, like this was a moment.”
When Mr. Schumer described the meeting as “somber,” Mr. Dodd cut in. “Somber doesn’t begin to justify the words,” he said. “We have never heard language like this.”
“What you heard last evening,” he added, “is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly.”
Although Mr. Schumer, Mr. Dodd and other participants declined to repeat precisely what they were told by Mr. Bernanke and Mr. Paulson, they said the two men described the financial system as effectively bound in a knot that was being pulled tighter and tighter by the day.
