U.N. panel calls for new global currency to replace U.S. dollar

Tuesday 22nd September, 01:50 PM JST

NEW YORK —

The U.N. expert commission on overhauling the global financial system called Monday for a new international reserve currency to replace the U.S. dollar to make the world financial sector more stable and balanced. In a report to the president of the U.N. General Assembly, the commission said the international currency system has been unable to constrain the size of payment imbalances that have led to large dollar holdings. ‘‘This in turn has led to deterioration in confidence in the dollar’s role as a global store of value,’’ the report said.

The report said U.S. monetary policies have been implemented without consideration of their impact on global demand or demand for global liquidity and have become a potential cause of instability in exchange rates and global activity. Theoretically, the sum of all deficit countries’ balance of payments must equal the sum of all other countries’ surpluses, the report said. If a large number of countries seeks to increase trade surpluses, or if international institutions encourage deficit countries to improve their balance of payments, the deficits of the remaining countries will become increasingly large, it said.

‘‘With the dollar as the major international reserve currency, if the rest of the world seeks to run external surpluses, this will result in a decline in global income, unless the United States is willing to be the deficit country of last resort,’’ it said.

In turn, if U.S. macroeconomic policies are overly expansionary and the rest of the world is unwilling to accumulate dollar assets, the adjustment will also take place through downward adjustment in global income, the report said.

‘‘In either case the result is likely to be growing imbalances, exchange rate instability, and erosion of confidence in the dollar as a reserve currency,’’ said the report.

› Login to comment

Latest 15 of 29 Total Comments Show All

Sarge at 11:26 PM JST - 22nd September

I recommend the Federation credit.
Blue_Tiger at 11:38 PM JST - 22nd September

4thEstateDotCom - Well-said.
TumbleDry at 11:41 PM JST - 22nd September

China is seriously thinking to open sweat shops in US.
Sarge at 11:43 PM JST - 22nd September

Tumble - They can hire the illegal immigrants.
ca1ic0cat at 12:04 AM JST - 23rd September

I don't think the UN has a say in the matter even if they think they do. That committeed is just another waste of money; dollars, euros, renmimbi, whatever.
Icewind007 at 01:40 AM JST - 23rd September

I am surprised the conspiracy theorists haven't come out and complained that this will lead to the new world order.
TheQuestion at 02:17 AM JST - 23rd September

American money isn't as powerful as it used to be. Even Brazilian money is more than the dollar.

The USD isn't used because it's worth the most, it's used because it's the most stable in value while everybody else's flucuates up and down rather drastically, like the canadian dollar being as low as 72 cents in the 1990's to more than a dollar a few years ago to around 94 cents today.
rajakumar at 03:43 AM JST - 23rd September

Currencies are just checks written by central banks of nations,they can be destroyed and replaced by any new currency.

The Greenbacks,Yuans,Yens and many other currencies mix freely and are betted on/gambled by foreign exchange traders.

The yen fluctuates within a band of 10-20 percent with inflation of -1.8 percent,as it traded very much internationally via Japan exports.

It is hard for Japan to stabilise yen,they just let it rise and fall,keeping japan's economic fundamentals strong.

The Yuan does not fluctuate,as its value is controlled a lot by China central bank via printing of more or less Yuan currencies.

The yuan should fluctuate like Yen,keeping China economic fundamentals strongs. The Yuan has to be something like Yen. The US dollars also fuctuates in value against all currencies.

If world have a new global currency,all currencies of top trading natons must be replaced by this global currency issued by New Global International Central Bank. Europe has done it via Euro currency in Europe. The UN just need ask EU to help go about this new currency.

Will all major top trading nations/US accept this ?

How long will they all take to agree and implement?

It will take same procedure as Euro to do it.

China,EU, US,Japan and many others must change to this new currency gradually one by one,like Europe did.

I think if top nations did this,they will clean up whole world,of underground money . It will clean up world economic currency systems and clean up all drug cartel money/other illegal money laundering.

They also can follow present systems of printing currencies, more or less,according to what rate central banks of nations want.
grafton at 03:59 AM JST - 23rd September

This isn’t about money you carry around in your pocket, they want a benchmark currency that all other currencies can measured against. The US gets to keep its dollar but rather than look for a rate of exchange directly to (say) the Euro you do so via this “world currency”. Global markets as a whole determine the value of the global currency, not the insecure dollar. This is the old gold standard but using an abstract rather than a lump of metal. What it basically amounts to is taking away the power of the US dollar so that the state of the US economy no longer has the ability to damage world markets. So who gets to print this new money? There isn’t a need to print anything, this would be a bank value not a note you can put in your wallet.
bushlover at 06:26 AM JST - 23rd September

Let's call it the UN Peso and let North Korea print it.
GJDailleult at 07:17 AM JST - 23rd September

grafton is right, there is no currency printed, it is an exchange rate mechanism they are talking about. The new "currency" would be an averaged out basket of all currencies.
Molenir at 09:40 AM JST - 23rd September

grafton, whether there is actual money being printed or not, the concern is the same. Who is responsible for this new currency? And how would it be managed? Thats the primary concern. If its the UN, well pretty much forget the scheme entirely. The institution is way too corrupt. Too much instability at the moment to consider making this change.

rajakumar - One of the problems China has with its neighbors, is that their currency is not real. Its essentially monopoly money . Because the state artificially manipulates it, and sets its value, you don't have a realistic exchange. If there is a new standard adopted, it will have to be agreed to by all the primary players. The EU, Saudis, China, Brazil, Japan, Russia, and especially the US. Without all these parties on board, you can pretty much rule it out.
konaruki at 02:10 PM JST - 23rd September

They could make something like U.N./Global Currency with exchange rates for all the currency.

Like 1 UN = 1 US$
rajakumar at 04:19 PM JST - 23rd September

bushlover-UN needs to solve woes in Iran and North korea first,before going for a new global currency.

United Nations is poor and UN Pesos will also be poor.

There is need for UN to get richer via more peace deals in Iran/North korea first and elsewhere in UN, where there is lack of peace atmosphere.

Peace in all nations in UN,is start to all things rich.
ReikiZen at 06:06 PM JST - 1st October

You now what is scary. I never wanted to believe this whole New World Order thing but it is looking more and more like that is the case. One world government, one world currency. Man are people so stupid they don't see this. Next thing we will see is the world split into zones and thus is where we takes sides. Man I could have written this myself. Question now is can it be stopped before it is to late.

While this might sound simplistic I say that paying off our debt needs to be of the utmost importance. If we become debt free then maybe the dollar will stabilize. The economy will eventually rebound and confidence in the dollar would likely rise. After all what is really driving this recession is fear of the unknown. As long as people hunker down and don't go about their lives the economy will likely never recover. People aren't wanting to loose everything but they aren't wanting to sacrifice anything either. You can't have it both ways without giving up something else in return.

Distribution of wealth needs to be a focus as well. The more that people have as a general population, not just the rich. The stronger the economic recovery will be as a whole. Everyone needs to be held accountable for their own responsibilities and actions. If people don't have the money to take out a loan then don't do it. If you can't pay cash or make payments for something you don't need then don't do it. It is fiscal responsibility which is not easy but is necessary for any long-term recovery to have any effect.

I also say since the dollar is pretty much worthless we should be using our gold reserves since they are at their highest levels in decades. Some say that there is enough reserves to completely pay off any debt we have outstanding and then some. So why the heck don't we do it. Not to mention ending this stupid war needs to be a priority. You can't expect the economic recovery is going to have any effect when we keep forking out billions of dollars a week for a war which serves no purpose. Let them fight their own darn war which they have for thousands of years. Our presence there has done nothing as we need to focus on own own problems and not try to fix everyone else's.