U.N calls for abandoning the U.S. dollar as I can't store value safe

[sandwind]

The report supports replacing the dollar with the International Monetary Fund's special drawing rights (SDRs), an international reserve asset that is used as a unit of payment on IMF loans and is made up of a basket of currencies.

http://www.reuters.com/article/idUSTRE65S40620100629

[Mega]

Re: U.N calls for abandoning the U.S. dollar as I can't store value safe

WE are entering the End game.
Mike

[bill]

Re: U.N calls for abandoning the U.S. dollar as I can't store value safe

The report supports replacing the dollar with the International Monetary Fund's special drawing rights (SDRs), an international reserve asset that is used as a unit of payment on IMF loans and is made up of a basket of currencies.

http://www.reuters.com/article/idUSTRE65S40620100629

http://www.un.org/esa/policy/wess/we...s/wess2010.pdf

Fifth, a new global reserve system could be created, one that no longer relies
on the United States dollar as the single major reserve currency. The dollar has proved not
to be a stable store of value, which is a requisite for a stable reserve currency. Nonetheless,
motivated in part by needs for self-insurance against volatility in commodity markets
and capital flows, many developing countries accumulated vast amounts of such reserves
during the 2000s. Hence, a new system needs to be developed. That system should allow
for better pooling of reserves at the regional and international levels; it must not be based
on a single currency or even multiple national currencies but, instead, should permit the
emission of international liquidity (such as SDRs) to create a more stable global financial
system. Such emissions of international liquidity could also underpin the financing of

investment in long-term sustainable development, as suggested above.

page 128

A feasible evolutionary path towards a more stable system is one along which
there is an increased use of SDRs, within a system of nationally supplied reserve assets,
dominated by the dollar. The current crisis has already seen a more than 10-fold ad hoc
increase in the total quantity of SDRs in existence. The SDR, already the unit of account
of IMF, is a basket of four currencies—the dollar, the euro, the Japanese yen and the
pound sterling. The weight of each currency in the basket, last revised in November 2005,
is based on the value of the exports of goods and services and the amount of reserves
denominated in the respective currencies held by other members of IMF. In the future
and given the changing weights in the global economy, other currencies, including those
of emerging market economies, would need to be included in the SDR basket.
The members of IMF could start a process directed towards increasing the use
of SDRs as a currency for central bank operations among themselves (though under the
present rules, the United States has a single-country blocking vote on the issue of increased
SDR allocations). SDRs could be increased through periodic allocations in line with the
expansion of international commerce. The Commission of Experts of the President of

the United Nations General Assembly on Reforms of the International Monetary and

Financial System proposed regular or counter-cyclical issuance of SDRs (United Nations,
General Assembly, 2009b; D’Arista and Erturk, 2010). IMF could begin by using only
SDRs in its standby lending and extinguishing them as loans are paid back. SDRs could
also be invested in bonds issued by regional development banks.

13 The Commission
also advocates using SDRs to support regional financing requirements (United Nations,
General Assembly, 2009b).
Proposals to shift to the allocation of SDRs based on need or performance,
instead of on the economic significance that determines voting shares in IMF, are of great
interest. Ocampo (2009) proposes giving larger allocations to countries with the highest
demand for reserves and allowing IMF to use unutilized SDRs to buy bonds from developing
countries. Ocampo proposes generous overdraft or “drawing” facilities which could
be used on an unconditional basis by all member countries and recommends that IMF be
authorized to suspend the right of countries with large surpluses or excessive reserves to
receive SDR allocations.
To turn the SDR into an investment asset or a unit of value (roles that the
United States dollar plays at this time), more institutional changes and more time would
be required, along with possibly giving IMF the role of a market maker for the buying and
selling of SDRs at spreads comparable to those on the United States dollar (Eichengreen,
2009). Additional international agreements (regarding what kind of debts SDRs might
discharge, for example) could also increase its viability as an investment asset.
To summarize, reducing dependence on the dollar through increased use of a
created currency made up of a basket of currencies such as the SDR could be a significant
step towards greater stability in the world economy. Greater SDR use would constitute an
additional tool for creating the international liquidity needed for the conduct of a global
counter-cyclical policy, for which there is already a precedent, as reflected in the April 2009
decision of the G-20. Greater reliance on the SDR could also open up the possibility of utilizing
such a created currency for development or other global purposes. SDRs can be used to
swap for bonds of developing countries or backstop the issuance of global bonds whose proceeds
could be used for specific purposes. This latter approach basically describes the mechanism
for climate change financing proposed in a recent IMF staff paper (Bredenkamp and
Pattillo, 2010). Developed countries would pledge their SDR allocations to a “green fund”

which would then float bonds backed by the SDRs to fund climate change spending.

[c1ue]

Re: U.N calls for abandoning the U.S. dollar as I can't store value safe

Developed countries would pledge their SDR allocations to a “green fund”
which would then float bonds backed by the SDRs to fund climate change spending.

Replace Arabs and their billions with Developing Nations and their Climate Change indulgences:

[LargoWinch]

Re: U.N calls for abandoning the U.S. dollar as I can't store value safe

Huh, who cares about the U.N., IMF, ABC anymore?

No, Mr. Market has been abandoning the dollar since 2001.

[thriftyandboringinohio]

Re: U.N calls for abandoning the U.S. dollar as I can't store value safe

http://www.un.org/esa/policy/wess/we...s/wess2010.pdf


page 128

Bill, thanks for the excellent work reading the reading the large source document and bringing certain excerpts forward.

[bill]

Re: U.N calls for abandoning the U.S. dollar as I can't store value safe

Bill, thanks for the excellent work reading the reading the large source document and bringing certain excerpts forward.

I actually found the report by accident early today searching for Queen Elizabeth II General Assembly speech to be given on July 6.
So far I just came up with this notice.

http://www.un.org/Docs/journal/En/lateste.pdf

General Assembly

Sixty-fourth session
Her Majesty Queen Elizabeth II will address the General Assembly on Tuesday, 6 July 2010, at 3 p.m. in the General Assembly Hall.

All are kindly requested to be seated by 2.45 p.m.

The arrangements that will be in effect at United Nations Headquarters for admission to the premises during the visit are described in information circular STIC201020///.

[bill]

Re: U.N calls for abandoning the U.S. dollar as I can't store value safe

I actually found the report by accident early today searching for Queen Elizabeth II General Assembly speech to be given on July 6.
So far I just came up with this notice.

http://www.un.org/Docs/journal/En/lateste.pdf

live now
http://www.c-span.org/Watch/C-SPAN.aspx