Wednesday, September 9, 2009

UN Report calls for Global Currency to Replace $

United Nations' Conference Report calls for Global Currency to Replace U.S. Dollar

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Early this morning as Asia’s financial markets opened, gold futures opened and stayed above the $1,000 mark for the first time in 6 months.

I’ve been appearing in a good many TV and Internet financial news shows predicting gold would jump over $1,000 and perhaps as high as $1200 by years end. We are still in the early stages of an economic crisis that will eventually evolve into monetary collapse that will literally change the world we live in.

Today’s push above $1,000 comes on the same day that a UN Conference on Trade and Development (UNCTAD) released a new report that asserts the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises we’ve seen the past two years.

The report suggests that the U.S. Dollars role as world’s reserve currency be re-examined.

While it is true a number of countries, including China and Russia, have suggested the U.S. dollar be replaced as the world's reserve currency, this report by UNCTAD is the first time a major multinational institution made such a suggestion.

The UN conference report suggests a new Bretton Woods-style system of managed international exchange rates that would require central banks intervene and either support or push down their currencies depending on how the rest of the world economy is behaving.

The UN report suggests surplus nations such as China and Germany should stimulate their economies further in order to cut their own imbalances, rather than, as in the present system, deficit nations such as the UK and US continuing to take the main burden of readjustment.

"Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability," said Detlef Kotte, one of the report's authors. "But you will also need a system of managed exchange rates. Countries should keep real exchange rates [adjusted for inflation] stable. Central banks would have to intervene and if not they would have to be told to do so by a multilateral institution such as the International Monetary Fund."

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