Posted on 03/26/2009 5:18:52 PM PDT by Gordon Greene
A UN panel of expert economists pressed Thursday for a new global currency reserve scheme to replace the volatile, dollar-based system and for coordinated steps by rich countries to stimulate their economies. "A new Global Reserve System -- what may be viewed as a greatly expanded SDR (Special Drawing Rights), with regular or cyclically adjusted emissions calibrated to the size of reserve accumulations, could contribute to global stability, economic strength and global equity," the panel said.
As part of several recommendations to tackle the global financial crisis, the panel also noted recovery would require all developed countries, in the short term, to take "strong, coordinated and effective actions to stimulate their economies."
(Excerpt) Read more at breitbart.com ...
"...could contribute to global stability, economic strength and global equity," then go read the article.
Don't you want to take part in global equity with 3rd world countries? Sounds fun guys!!! Come on... where's your sense of fairness??
Litmus Test:
UN says good -
Must Be Bad.
We’ve already been taking part in ‘global equity’ with the third world. That’s why we have unfettered illegal immigration,revived slave labor and human trafficking in this country, why taxpayers are ‘bailing out’ transnational corporations who do business with the third world, why our congress has pushed outsourcing and offshoring of our manufacturing and service sectors to the third world.
“The Russians and the Chinese would not be pushing for this if they were not trying to destabilize the dollar and destroy the US economy.”
They’re trying to stop Obama from destabilizing the dollar and destroying their investments in the US Economy. 25% of Russia foreign holdings are invested in US mortgage backed securities.
“The issue of the world currency reserve is expected to be raised at the April 2 summit of the G20 club of developed and emerging economies.”
Exactly. It’s a bargaining chip, a threat to Obama, Geithner, and I have a hunch, Rahm Emanuel the investment banker.
But the world does not understand how arrogant this group of people are.
They don't need a new international monetary system to do that.
They want one because they'd rather keep the value of their 2 trillion dollars intact - but gradually diversify those holdings without setting off any stampede. If that means they lend to the IMF for some of their new export earnings, fine.
So they want another parking place for their regular increments in foreign exchange reserves. If they put them all in Euros next year and said so, they'd set off a stampede and undermine their existing dollar holdings. Not helpful. They'd also wind up doubling the US dollar price of all their export goods. Not helpful. So instead they want a safe way to park them that other people do, too, so they aren't trading away from the market but just taking the average neutral position everyone else is.
The mechanism they've dreamed up for that is to buy SDRs while the IMF takes its dollars in payment. The IMF stands ready to redeem SDRs for a basket of dollars, euros, pounds, and yen. So they blunt their dollar exchange risk right there. The IMF can recycle the dollars to its "ward" borrowers and needs the capital. If longer term the IMF also gradually accumulates gold, perhaps SDRs hold their value rather better than the dollar has over the last 40 years.
Without the Chinese ever needing to cry "sell" and shoot their own foot off.
It is a perfectly sensible proposal. As usual, populist know-nothings therefore assume it is a grand conspiracy to cheat them, not having notice that China's wealth and the rest of the world's needs have approximately nothing to do with them, since they already "busted".
“As usual, populist know-nothings therefore assume it is a grand conspiracy to cheat them”
While your observations of what’s happening in the world are for the most part correct, your faith in anything the UN does is at best misguided. The argument you present is full of holes... there’s no need to talk of “global equity” if it’s nothing more than a way for everyone to feel their currency and investments are “safe”.
To believe that anything the UN does or even suggests is for the betterment of the US is strange to me. Maybe that’s because they’re corrupt and prop up evil dictators... Do you really trust their intentions that much?
Do you work in finance? All your postings seem to be in that genre...
Sixty years and uncountable trillions of dollars given as foreign aid to the entire rest of the frickin' world. Hundreds of thousands of American lives given for the peace and safety of the rest of the world. And now they're going to whine when the cashflow temporarily goes the other way?
F!k the developing countries. F!k the UN. Boot their sorry a¿*es out of our country, raze that cesspool of an ugly building, and sow salt where it once stood so that nothing ever grows there again.
Actually, I agree with you. And as being a threat, if you meant an idle one, I did think it might be, because I assumed there would have to be some kind of international deficit/budget control, like in the Eurozone. But you have explained well otherwise, thank you.
What does your tagline mean?
You know it is a very good question... how does this kind of thinking make sense when America has always bailed out other countries...
“”Developing countries are lending the United States trillions dollars at almost zero interest rates when they have huge needs themselves,” Stiglitz noted. “It’s indicative of the nature of the problem. It’s a net transfer, in a sense, to the United States, a form of foreign aid.””
“Latin American leaders say the U.S. must quickly fix the financial crisis it created before the rest of the world’s hard-won economic gains are lost.”
Nerve, nerve... America’s “casino capitalism” has gotten the world’s tail out of a crack more times than could be counted. Anyone who believes this crap has got nerve...
That was my point. The Chinese are currently propping up the dollar and financing the huge US deficit. There have been many articles about how the US and China are codependent. The argument they use is that if you owe enough money to the bank they can't let you fail. China wants to let the US economy be destroyed and the dollar be weakened without it hurting them. I believe Obama and the Democrats are also working towards this.
Is he right that it is flat crazy that the US with much of the world's wealth imports capital on an epic scale, while much poorer countries save religiously and export much of the little they can accumulate by way of capital, to be invested here rather than at home? Yes it is flat crazy.
Three things perpetuate that craziness. Mercantilist economic set ups abroad, reckless lack of saving and debt spending here, and one more that is less destructive and but in a way more tragic. This remains the best environment for investing capital on earth, and property, not respected enough here, is respected even less in the countries exporting their savings to us.
In a sane world, capital would be safe wherever, and would be invested where most needed, and would naturally flow from the wealthy to the less wealthy, and in doing so would gradually reduce the gaps between them. While also lifting all boats, and helping the wealthy to earn passive income from investments abroad. Instead we have a perverse set of international capital flows where poor men in Asia save 40% of what little they produce, so that spendthift wards of the state in America can consume five times what they produce - or 3/4 of what their rich neighbors consume, while producing nothing at all.
And no, I don't think it is patriotism to try to keep that going...
They want those securities to retain their value. And they want the US to continue to buy from them. They just aren't nearly as confident that *we* can keep up either side of that, as they were 2 years ago. They want to diversify because the US doesn't look like as sure a thing.
And they are right. It isn't as sure a thing. You don't need to like that for it to be true, and it isn't any nefarious hostile intent on their part to notice it, nor to want to do something about it.
The money is theirs. They earned it. They'll do with it what is in their own interests. It is our business to make that something that is also in ours.
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