Posted by: John Gilmore | September 15, 2006

UN Report: Dollar Should Be Replaced As Main Reserve Currency – June 30 2010

I’ve noticed that when it comes to mainstream media – you’ll never find the important articles on the front page.  They are usually buried somewhere deep in the paper.  Most people glance through their morning paper and have no idea what that they are being conditioned for future events.  Those who know what to look for – see and understand what is happening.

Don’t think the demise of the dollar has been planned in advance?  You’ve seen me list multiple mainstream articles on this blog supporting a new world currency.  Leaders of nations and global organizations (Council on Foreign Relations and the United Nations) have been advocating a new global reserve currency for some time.  Why are they doing this?  They know what’s coming.

What could be the catalyst to push the world to accept a new global financial system with a global currency?  That would be a global economic collapse.  We are dealing with masters of deception and manipulation.

As I’ve said many times – regardless of what Obama, Bernanke, the IMF, the ECB, etc. – say about how the global economy is recovering – the truth is that the world’s economy is collapsing – according to plan.

jg – June 30, 2010

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JUNE 29, 2010, 4:06 P.M. ET

Wall St. Journal

UN Report: Dollar Should Be Replaced As Main Reserve Currency

 By Frances McInnis    DOW JONES NEWSWIRES 

 NEW YORK (Dow Jones)–The dollar should be replaced as the main global reserve currency in order to achieve greater stability in the world financial system, a United Nations report urged Tuesday.

“The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency,” said the World Economic and Social Survey 2010.

The report said a new system should be developed, which “must not be based on a single currency or even multiple national currencies.” Instead, the report advocates the increased use of International Monetary Fund accounting units called Special Drawing Rights as a reserve asset.

SDRs are based on a basket of four currencies: the dollar, the euro, the yen and the U.K. pound. The weight of each currency in the basket stems from the value of exports and the amount of reserves denominated in the respective currencies held by other members of the IMF.

The U.N.’s suggestion is the latest in a series of proposals that have gained prominence since the financial crisis. Last year, Nobel laureate economist Joseph Stiglitz led a U.N.-appointed panel that also urged the replacement of the dollar as the world’s reserve currency. Developing nations with high currency reserves, led by China, have also been vocal about the need to create a new global reserve currency.

None of these proposals have gained traction, however. Fourth-quarter data from the International Monetary Fund show the dollar’s share of currency reserves at 62.1%, a slight increase from the third quarter.

The recommendation is only a small part of the 200-page U.N. report, which is mainly focused on sustainable economic growth. The U.N. cannot directly act upon the report’s recommendation to replace the dollar as the main global reserve currency since increased use of SDRs falls under the purview of the IMF and World Bank.

The panel chaired by Stiglitz published a report in March 2009 that also proposed a SDR-based reserve system, arguing this “could contribute to global stability, economic strength, and global equity.”

Earlier this year, Dominique Strauss-Kahn, managing director of the IMF, also envisioned the prospect that the fund could one day be the global provider of reserves. In a broad-ranging speech on the future mandate of the IMF, Strauss-Kahn stopped short of calling for a fund-created reserve asset, but said it is a longer-term issue worth considering.

A truly global reserve currency, he said, “would limit the extent to which the international monetary system as a whole depends on the policies and conditions of a single, albeit dominant, country.”

 -By Frances McInnis, Dow Jones Newswires; 212-416-3417; frances.mcinnis@dowjones.com

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JUNE 29, 2010, 7:09 P.M. ET

Wall St. Journal

Overheard: Currency Reservations

Fiat currencies are the ultimate confidence trick. In which other situation would you accept the word of a government official you have never met that your wealth is safe in their hands?

Recent experiments in money printing have led many to question their faith in paper currencies, particularly the dollar. Now the authors of the United Nations’ 2010 World Economic and Social Survey have added their voice. They propose a new global reserve system that no longer relies on the dollar as the single major reserve currency because the U.S. currency “has proved not to be a stable store of value, which is a prerequisite for a stable reserve currency.”

Trouble is, reserve currencies are begotten not made. And if a radical overhaul of the global monetary system really is required, the euro is hardly a model of stability.

That leaves one credible alternative: a yellow metal whose intrinsic value is also somewhat hard to define, but is up 13% and 33% against the dollar and euro this year.

—overheard@wsj.com

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