Gulf of Mexico Oil Spill Blog IMF Special Drawing Right Replace Dollar Reserve Currency

IMF Special Drawing Right Replace Dollar Reserve Currency

Special Drawing Right

Special Drawing Right

Move to Replace Dollar as World Reserve Currency Hastening

Elizabeth Delaney Elizabeth Delaney

China, Russia, even the United Nations have suggested it is time to replace the U.S. dollar as the world reserve currency. On Thursday, CNN reported the IMF is now joining the bandwagon.

Apparently, with the current worldwide financial crisis, all of the bailouts and the high debt load that the U.S. is carrying, the leaders of many countries are losing confidence in the dollar and want to see something  that is more globally oriented.

The U.K. Telegraph reported in 2009 that to replace the dollar as the global reserve currency would mean a major financial overhaul. The largest since World War II. There has been much speculation as to whose currency would be used for the new reserve, but it appears it won’t be any that are presently in place.

Since the G20 is concerned about a “global economic balance,” the use of any individual nation’s currency that presently exists would be disruptive to the balance that they seek. This would be one reason why the Special Drawing Right is being considered. and an International Business Times article from 2009 notes an SDR is “defined as a basket of currencies which today consists of the euro, Japanese yen, pound sterling and U.S. dollar.” In addition, an SDR “is neither a currency, nor a claim on the IMF. Rather it is a potential claim on the freely usable currencies to IMF members.” Apparently, it’s something of a virtual currency.

SDRs are what CNN is reporting as an option the IMF is considering because, “The goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to awing in the domestic economy and changes in U.S. policy. In addition to serving as a reserve currency,the IMF also proposed creating SDR-denominated bonds, which could reduce central banks’ dependence on U.S. Treasuries. The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs. Oil prices usually go up when the dollar depreciates. Supporters say using SDRs to price oil on the global market could help prevent spikes in energy prices that often occur when the dollar weakens significantly.”

Another possibility being developed is something called the Bancor, according to an Info Wars article from August 2010: “So where in the world did the name ‘Bancor’ come from? Well, it turns out that ‘Bancor’ is the name of a hypothetical world currency unit once suggested by John Maynard Keynes. Keynes was a world famous British economist who headed the World Banking Commission that created the IMF during the Brenton Woods negotiations.”

While the creators of this idea would like to see Bancor use implemented immediately among many nations, the article notes that they have, “also acknowledged that a more ‘realistic’ approach would be for the ‘Bancor’ to circulate alongside national currencies at first …” Similar to the way the debt based euro did as European nations switched over to using the euro.

The idea of the Bancor was also noted by Prison Planet in August 2010. In fact, it even touched on the idea of a global taxation system to compliment this new global currency, and implied that it would be some sort of a crisis that would help launch the Bancor into existence.

Perhaps one of the most interesting recent events that seems to herald the hastening of a new reserve currency was reported by NBC New York on Friday: “A German company is in high-level talks to acquire the New York Stock Exchange , Wall Street‘s most recognizable institution. According to reports published in both the German and American financial press, Deutsche Borse, a Frankfurt-based stock exchange is seeking to take a 60 percent ownership interest in the NYSE. The merger would create the world’s largest financial exchange.”

source: Move to Replace Dollar as World Reserve Currency Hastening – Associated Content from Yahoo! – associatedcontent.com

editors note: when the dollar is replaced, cheap gas in the U.S. will be a thing of the past. Because of quantitative easing, which means printing money, Bernanke has driven up the price of oil and the cost of FOOD. The worlds poor are starving and therefore rioting because of this arcane policy.

When the dollar is no longer the world reserve currency, the rich will not be able to stay rich at the expense of the poor.

 

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