Is it the beginning of the end for the American Empire?
More and more media are tackling the issue of the American Dollar and its status as the international reserve currency. What alternatives are there on the table?
For answers, take a look at the links below:
Chart on left: The US Dollar from July 2000 to November 2006 chart source: First Gold
- UN wants new global currency to replace dollar
The dollar should be replaced with a global currency, the United Nations has said, proposing the biggest overhaul of the world's monetary system since the Second World War. (Telegraph, UK refering to recent UNCTAD report) - Raw Story: The United Nations Conference on Trade and Development said in a report published Monday that the U.S. dollar should be replaced as the world’s standard reserve currency, giving rise to a new global currency managed by an as-yet undetermined financial regulatory organization
- U.N. panel says world should ditch dollar
Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket. - World Abandoning the US Dollar as International Currency For Trade : A number of countries, including China and Russia, have suggested replacing the dollar as the world's reserve currency
- China's central bank has reiterated its call for a new reserve currency to replace the US dollar. (BBC News)
The report from the People's Bank of China (PBOC) said a "super-sovereign" currency should take its place.
July 4 (Bloomberg) -- Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.
“The major part of Indian reserves is in dollars -- that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview yesterday in Aix-en-Provence, France, where he was attending an economic conference.
The U.S Dollar is Diving
- "The Telegraph": A former Bank of England policymaker: Americans must prepare themselves for a massive collapse in the dollar as investors around the world dump their US assets
The dollar had been kept elevated in recent years by what some called "dark matter" or "American alpha" - an assumption that the US could earn more on its overseas investments than foreign investors could make on their American assets. However, this notion had been gradually dismantled in recent years, before being dealt a fatal blow by the current financial crisis, he said.
- Paul Craig Roberts (Counterpunch): As the Dollar Falls Off the Cliff ...
America’s trading partners do not have large enough trade surpluses to finance a federal budget deficit swollen to $2 trillion by gratuitous wars, recession, bailouts, and stimulus programs. Moreover, concern over the dollar’s future is causing America’s foreign creditors to seek alternatives to US debt in which to hold their foreign reserves.
According to a recent report in the online edition of Pravda, Russia’s central bank now holds a larger proportion of its reserves in euros than in US dollars. On May 18 the Financial Times reported that China and Brazil are considering bypassing the dollar and conducting their mutual trade in their own currencies. Other reports say that China has increased its gold reserves by 75 per cent in recent years.
- Paul Craig Roberts: How the US Economy Was Lost
The demise of America’s productive economy left the US economy dependent on finance, in which the US remained dominant because the dollar is the reserve currency. With the departure of factories, finance went in new directions. Mortgages, which were once held in the portfolios of the issuer, were securitized. Individual mortgage debts were combined into a “security.” The next step was to strip out the interest payments to the mortgages and sell them as derivatives, thus creating a third debt instrument based on the original mortgages.
- The Future of the Dollar
A 6-page US policy brief assesses whether there are feasible alternatives to the US dollar as a widely used international currency.
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