Tuesday, August 10, 2010

Blueprint for a global currency- the bancor

Isn't this interesting??? Global government. Global Currency.
From the Financial Times of London Lamenting the fact that they missed this little goodie from the IMF, which came out in a public policy paper April 2010.

"FT Alphaville missed this IMF paper when it first came out in April, 2010.
(links to the document)

Authored by Reza Moghadam, director of the IMF’s strategy, policy and review department, it discusses how the IMF sees the International Monetary System evolving after the financial crisis.

In the eyes of the IMF at least, the best way to ensure the stability of the international monetary system (post crisis) is actually by launching a global currency.

And that, the IMF says, is largely because sovereigns — as they stand — cannot be trusted to redistribute surplus reserves, or battle their deficits, themselves.

Or as they put it-

The global crisis of 2008/09, for all its costs, has not jeopardized international monetary stability, and the IMS is not on the verge of collapse. That said, the current system has serious imperfections that feed and facilitate policies—of reserves accumulation and reserves creation—that are ultimately unsustainable and, until they are reversed, expose the system to risks and shocks that a reformed system could minimize.

All in all, the IMF believes there has simply been too much reserve hoarding going on:

Reserve accumulation has accelerated dramatically in the past decade, particularly since the 2003-4. At the end of 2009, reserves had risen to 13 percent of global GDP, doubling from their 2000 level, and over 50 percent of total imports of goods and services. Emerging market holdings rose to 32 percent of their GDP (26 percent excluding China). Twenty-seven of the top 40 reserve holders, accounting for over 90 percent of total reserve holdings, recorded doubledigit average growth in reserves over 1999-2008.

Holdings have also become increasingly concentrated, with over half the total held by only five countries. These numbers exclude substantial foreign assets of the official sector not recorded as reserves, including in sovereign wealth funds (SWFs), and yet invested in liquid, dollar denominated financial instruments, that have grown even more in recent years.1


Of course, in the first instance, the solution probably lies in closer collaboration between sovereigns, most likely via the more active use of such things as special drawing rights, says the IMF.

But in the end, a global currency makes the most sense, the paper concludes — especially since the SDR is currently just an accounting tool that draws on the freely usable currencies of member states , not an actual currency itself.

As they summarise: (Pg.26 of the pdf link)

48. From SDR to bancor. A limitation of the SDR as discussed previously is that it is not a currency. Both the SDR and SDR-denominated instruments need to be converted eventually to a national currency for most payments or interventions in foreign exchange markets, which adds to cumbersome use in transactions.

And though an SDR-based system would move away from a dominant national currency, the SDR’s value remains heavily linked to the conditions and performance of the major component countries. A more ambitious reform option would be to build on the previous ideas and develop, over time, a global currency. Called, for example, bancor in honor of Keynes, such a currency could be used as a medium of exchange—an “outside money” in contrast to the SDR which remains an “inside money”.



A global currency?! No surprise there! Hasn't this whole banksters manufactured crisis been leading right towards that inevitable outcome. Global Control!

2 comments:

  1. It's a good thing then the IMF hasn't been in trouble because of other sovereign reserves mishandling their money or lending . . .

    . . . as the IMF has only imaginary wealth, which it can create at the touch of a button or two.

    No trouble!

    Citizens of the world working real labour and producing tangible products to get a small amount of financial credit (money) . . . to support and uphold the lavish lifestyles of the rich and famous (who are idolised) and who can create money out of thin air . . .

    . . . is nothing at all different than a peasant paying tithes to some land Baron - allowing them to live and breathe and carry on - and then throwing roses and gifts at the princess or Queen when they roll into town.

    Not the slightest difference.

    Well, at least we have an easier life, right?

    You must be middle class if that's what you just answered. Don't get used to it.

    ReplyDelete
  2. excellent comment, and I like the analogy!

    ty

    ReplyDelete

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