Posted on 07/14/2010 8:18:36 AM PDT by SeekAndFind
Imagine a world without the almighty greenback as the main reserve currency.
It's not an easy thought. The U.S. dollar has long been the global currency of choice. As much as 64% of the world's currency reserves are held in greenbacks, according to the IMF.
But given the manic ups and downs of the dollar in recent years, it may finally be time to diversify the world's reserves. And that's exactly what some central bankers around the globe are now doing.
This comes as a growing number of economists and policymakers are calling to move away from the greenback as the world's dominant currency. A recent United Nations report says the dollar's movements have been too erratic to hold value and the UN urges central banks to replace it with anything but a single currency or even multiple-national currencies.
One potential replacement is special drawing rights (SDRs), the international reserve created by the IMF in 1969. SDRs aren't something you can carry in your pocket like cash. They represent potential claims on currencies of IMF members. Because the value of SDRs is based on a basket of the world's major currencies (US dollars, yen, euros and pounds), its value typically isn't as volatile as a single currency. Central bankers in Russia and China have supported the idea of SDRs.
"I think there is a general sense that these recommendations are at least worth debating," says José Antonio Ocampo, a Columbia University professor who served on a UN expert commission that considered ways of overhauling the global financial system. Ocampo says lessons learned following the financial crisis have renewed interest in the development of a global multi-currency system including SDRs.
(Excerpt) Read more at money.cnn.com ...
Time to buy everything. That’s the answer. No one knows what will enrich next year, next month or next week!
Diversify well and worry not.
-Rex
The world already has a true reserve currency. Gold.
In a year we’ll be trading chickens.
How about Geese that lay golden eggs?
Well I followed the opposite advice and have done ok.
You can thank the collapse of Communism in Greece, and the economic woes of the rest of Socialist Europe for thus far hiding the disaster to come, that is the US Dollar.
I grieve watching my once-great nation commit suicide. When the electorate ceases to be moral and informed, and votes itself largesse from the public Treasury, you are doomed, as we are.
I would give my left arm to see the nation rebound from this, but I grieve that an increasingly ignorant and immoral/amoral electorate guarantees our national suicide.
I can’t even begin to imagine the impact of losing the USD as the world’s reserve currency. It has played no small role in our quality of life and lifestyle.
We are economically becoming Britain, socially becoming France, and morally becoming Italy.
I hate watching my nation commit suicide. Scratch that. I have a front row seat to the suicide of Western Civilization.
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