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UN calls for global currency

Discussion in 'Political Discussion' started by DisgruntledTunaFan, Jun 29, 2010.

  1. DisgruntledTunaFan

    DisgruntledTunaFan Rookie

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    Scrap dollar as sole reserve currency: U.N. report - Yahoo! News

    UNITED NATIONS (Reuters) – A new United Nations report released on Tuesday calls for abandoning the U.S. dollar as the main global reserve currency, saying it has been unable to safeguard value.

    But several European officials attending a high-level meeting of the U.N. Economic and Social Council countered by saying that the market, not politicians, would determine what currencies countries would keep on hand for reserves.

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

    The report says that developing countries have been hit by the U.S. dollar's loss of value in recent years.

    read more
  2. pherein

    pherein Rookie

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    Might be a good idea, but will never gain ground. America holds the High. blue chip, stock in currency and trading currency is its own Stock Market. I don't see wall Street or the Government agreeing to this.
  3. PatsFanInVa

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    Tuna, take off the tinfoil helmet for a minute. This is indeed a significant story, and it's been developing for a while. From your article:

    Look at the headline under which you posted. I understand what you want to be happening: the "decentralized" currencies of the world being replaced with "one world currency", part of some sort of 666-stamped, Revelation-affirming grand master plan of THEM involving the illuminati, the freemasons, the knights templar, the elders of zion, whatever.

    Here's what actually is happening, again, all from the article you posted:

    1) Currently the "one world currency" - i.e., the global reserve currency - is the dollar, of which nations build up hordes because the dollar has been considered such a stable and reliable peg for the rest of the world.

    2) Now, a U.N. report is urging the replacement of the dollar with a basket of currencies. That is to say, there already is a global currency - if that's how you choose portray a reserve currency - and it is being done away with.

    3) Both the dollar and the proposed replacement are in use today. The dollar doubles as our national currency. The SDRs are basically a device made up of many currencies, and are not used to -- say -- buy a pack of baseball cards, nor will it ever be under this proposal.


    PFnV
  4. pherein

    pherein Rookie

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    I actually saw and have seen what you expressed here, but what if the U.N. decides to make their own currency and to make its own treasury department?
    Most of the economically weaker countries will comply.The overtones are a bit crazy, but the reality its interesting. I mean no one thought the Euro-states were even possible before they did it. Does the E.U. now try to gain control of the dollar by using the U.N., interesting.
    Last edited: Jun 30, 2010
  5. PatsFanInVa

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    I think it's more a matter of declaring the dollar unreliable, and in terms of the number of countries, you have more of a concern with the A.U. than the E.U.

    You get to call a lot of shots when you're the sole reserve currency. It's not so much a matter of "controlling" the dollar, it's removing the position the dollar, and no other currency in the world, currently enjoys.

    The report's authors have a point, and can back it with anybody who has ever talked about the importance of diversification in any sort of portfolio. Many here who disagree with me on economic issues have pointed to Greece as America's "future". As I say, I disagree with them. But the fortunes of Greece would make a sorry case for the Drachma as the world currency. The euro is being hit as the Greeks drag down the E.U. - it's a test of how like "states" the European nations want to be (to use the U.S. sense of the word "state.")

    Does Germany just say, screw it, we're Germans, we don't need this, and let the whole Eurozone collapse -- or do they see it through?

    Regardless, the Euro itself would be, in retrospect, a terrible world reserve currency, given the Southern european disaster.

    Now, if our local doomsayers are right and the U.S. is the next Greece - with no Eurozone to bail us out, no less - do you want a reserve currency subject to that fluctuation?

    That's the whole purpose of a reserve currency, to have a stable "safe bet." The U.S. dollar had been unquestioned in that regard for decades, until he 08 collapse.

    Insofar as currencies back currencies (as opposed to similarly intrinsically value-neutral precious metals), the dollar is a single currency. The report recommends using another mechanism, one that backs one nation's currency with stable units that can render a baseline not tied to one national economy's ups and downs.

    But it sure doesn't create a "Globo" or something that you will ever use at the store.
  6. pherein

    pherein Rookie

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    America is Greece theory is silly. I agree on that. Greece is in no way as diversified economically as America is, makes no sense. As much as the world wines about our consumption they love it, we keep them in bullishness, and foreign investors are even happier.

    We'll this is were it becomes interesting. Does the E.U. weather this out or do they see an opportunity here to common place their currency and move one step toward the dollar standard?

    Personally I would work with the U.N. if I was president of the E.U. , I wouldn't be surprised to see that happening.
    Last edited: Jun 30, 2010
  7. mcgraw_wv

    mcgraw_wv Rookie

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    What your saying, and why I fear this is a bad move is basically they want a Fiat currency which is backed up by a "Currency Backed Security" basically, being a group of different fiat currencies which are backed by nothing more than confidence.

    The issue here is we will have a new paper something which represents a grouping of paper, which represents really nothing...

    So what is this paper, and who deems it to be what price and have what purchasing power?

    Today, currencies fluctuated becuase they are compared against other currencies, so yours can rise and fall based on the perception weighed against the others... With one... there is no comparison, so the inevitable hard set of value must be assigned...

    It's like disbanding all NFL football teams to create one great team, but this 1 "NFL TEAM" has no one to compete against, so naturally, if your a fan of football, you like them, and think they are the best without any realm of possibility you might be wrong, with no competition... So the commisioner simply gets to deem how good they are, and how many records they deserve...

    A 1 world currency would just be set, politically, by the elites and lobbyists in order to assist and enrich those who hold the favor of the UN more than others.

    Then economies crash due to the increased / decreased perception of value that currency is set too...

    It won't happen, and if it does, I will be exchanging all my "savings" into something more tangible
  8. Real World

    Real World Moderator Staff Member

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    The UN wants a global currency. Anyone who doesn't see that, can't see the forest, from the trees. To have it happen, the UN needs to move incrementally. First, move to replace the dollar as the reserve currency. Then, once you've succeeded in doing that, you're on the road to creating a global currency. There is no unit more stable than the US Dollar, even in these uncertain economic times. Any "basket" that replaces it, will be far more unstable, if not easier for the UN to control, and eventually replace with something of its own. Just look at the Euro, and how it was being pimped, just 2 years ago, as a replacement for the dollar. How's that working out for ya? In another 2 years there might not even be a Euro.
  9. Leave No Doubt

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    Good post mc, thanks; well said and clearly explained.
  10. PatsFanInVa

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    Fine posts, bad analogy (McGraw) w/the "One great NFL team that everybody is a fan of." RW, you differ w/the report, and at the moment, you are exactly right. Relative to the euro (for example) they are wrong, right now. Relative to the last 50 years of history, they are wrong. Pulling out of use of the dollar as the reserve signals that they would prefer to mitigate risk of one national currency crashing by use of the "basket". The NFL team analogy is precisely wrong. It's more like every NFL team already has a designated Patriot they can use to stabilize their weak rosters in an emergency. Instead every team can choose from one player from throughout various squads. If the Pats are reliably stable and high-quality across the board it looks wise to have a "reserve Patriot" on every team. If the Pats haven't won the Super Bowl in 5 years, it looks less like a good way to prop up your roster. What if they suddenly become the Cowboys in the 1-15 years, instead of the super bowl years? You might not know for sure there's a better bet than the Pats, but figure if you throw in (say,) the Colts, Ravens, Saints, and Vikings, you have a better chance of covering all the league's ills.

    The report and the chatter in the last year or two owe from the fact that the U.S. dollar was the international reserve currency by virtue of its stability. The report was likely begun shortly after the 9/08 collapse. They evidently do not have the confidence that all the eggs in one basket is a sure bet. You can get disasterous volatility that way. But the recommendation spreads that risk across a variety of currencies, even possibly trading off greater likelihood of single-currency volatility elsewhere to mitigate the risk that the dollar will become disasterously unstable.

    Ten years ago this was not thinkable. Now it is.

    You'll note the SPDs (if I have the acronym right; going by memory) are scary in another way, which is that it would seem (by dint of the plural construction) that you could group different currencies into them and create "growth SPDs" and "stable" SPDs and "Five year upside SPDs"... unless there is ONE SPD -- ONE currency mix -- it becomes a possible speculative currency market, a casino of sorts. Desperate treasuries could make some disasterous bets, and desperate militaries could act to try to make those bets come about. (A U.S. administration goes long on Greece and shorts Turkey... and suddenly, it's a good time for a war starting in Cyprus, with a heavy US pro-Greek tilt...)

    McGraw points out that it is just a basket of currency you're making to back your currency, but that's not too much of a worry from the POV of anybody but the US. At present, your currency is backed only by paper from a foreign nation (the US). So you already have another sovereign power capable of manipulating your economy by virtue of its own currency. The fact that the paper would be made of other paper seems an ancillary point.

    The U.S. dollar is backed only by "faith and credit," not gold or silver. So if you're worried the U.S. will monetize its debt - that is, say "yeah I owe you $100, but now a dollar is worth 20% less" (i.e., devalue currency whether formally or through an inflationary period,) - you really don't want that currency backing your own. If you're not worried the US will do that, you don't concern yourself with changing the reserve currency.

    For decades our "faith and credit" was good enough. Now the UN's a bit edgy (more accurately, hedgy) on the subject.

    Ultimately, we can't force the rest of the world to use the dollar. Being the world's reserve currency has certain advantages, which we lose if this does ever come to pass. But that's exactly the funny part about the tinfoil-hat guy saying they're "making" a global currency. They're doing the opposite, taking the dollar down from that status. And a "global currency" is a misnomer, since it is a reserve currency (i.e., your endtimes prophecy will not be satisfied, since we are getting further from a "one world currency" than we were before, and it's not a currency the individual will ever have in his wallet - or his goatskin purse - anyway.)

    The other comments here are great - those 180 other countries have their nerve, trying to make us use their global basket of reserve currencies!

    I dunno if the report will have any legs or not, but there are 180 some countries out there using a foreign currency - ours - as a reserve currency. Think about it. Such a change may be bad for us, but they don't care. The advantage of being the country with the present reserve currency isn't something we "have" that they're "taking" and "making us" use another currency, somehow undermining our sovereignty. It's something they do because the dollar provides them stability. They can choose to use anything else they want, and we are one voice, representing one very large economy and one relatively stable currency.

    The UN is expressing lack of confidence that this will continue to be the case, or more accurately, taking the stance that it is not a sure thing, and that the increased risk associated with any one currency, unless it is "super-currency," is not worth the evening-out of risk implied by diversification.
    Last edited: Jun 30, 2010
  11. Leave No Doubt

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    'Zactly. Gold isn't skyrocketing for nothing and not to beat my tired old horse anybody who hasn't already invested in metals like a year or more ago is k-wazee.
    BTW what ever happened to the Amero? I remember talk of that one awhile back.
  12. PatsFanInVa

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    Yes, yes, we all need gold bars. Disaster awaits...

    Most talk I've seen about an Amero has been on silly right wing talk shows and on here. But the mythical Amero was basically taken from the Euro... I dunno if it was ever actually proposed other than as a "thing I fear" talking point. At any rate, as an analog to the Euro, no, this is not what the UN report is advocating. It's advocating removing the U.S. dollar as a reserve currency, and replacing it with many currencies. Again, that's off on two counts: 1 - it's the opposite of doing away with several currencies and replacing it with one; 2 - it's a reserve currency, not a national or supernational currency you spend in daily individual commerce.
  13. PatriotsReign

    PatriotsReign Rookie

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    When you have HUGE disparities in income and standards of living, it's impossible to impose a global currency in a short period.

    Imagine telling someone in Guatemala that they're going to be paid 4 "new currencies" per day when you know people in the US are making 250 of them for doing a similar job.

    It would cause incredible social, political and economic turmoil
    Last edited: Jun 30, 2010
  14. PatsFanInVa

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    Yeah. You have to be told you'll make 100 quetzals a day, while an American makes 75 dollars a day, with an exchange rate of eight quetzals to the dollar. They'll think they make more in Guatemala. :rolleyes:

    You really think the currency they're paid in masks the perception of inequality of income?

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