In a report published Monday, September 7, 2009, the United Nations Conference on Trade and Development acknowledged that the U.S. dollar must be replaced as the world’s reserve currency.
According to this article by Stephen Webster, Heiner Flassbeck, director of the conference, said that the changes currently demanded by the world’s financial systems “rival the scope of the Bretton Woods or European Monetary System agreements.”
This is big news.
But it’s been coming for a while, now. It is not that surprising.
What’s surprising is the speed with which the developments towards a new reserve currency have occurred. I’ve been covering the story for a while. If you’re new to these developments, check out some of the articles below.
More Information on the Replacement of the World Reserve Currency
What Is The World’s Reserve Currency?
Zhou Xiaochuan’s Proposal For World Reserve Currency is Accepted by UN (March 29, 2009)
U.S. Dollar Up For Debate At G8 Meeting (July 5, 2009)
Supracurrency Coin Proposed As New World Reserve Currency (July 12, 2009)
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{ 7 comments… read them below or add one }
Well it is definitely interesting, but the UN has lost a lot of influence over the last few years and they are more of an echo then a voice.
Who are they to make this suggestion when they are broke and rely on US funding? This statement should be enough to cause the US to pull the plug and dissolve the UN.
Not really, I don’t think that’s right. By definition the US is not an absolute authority over the UN…. that was the whole point of the UN’s formation. This is not a national issue, it’s an international issue. Replacing the world reserve currency with a new, as-yet-undetermined currency does not mean fashioning a unified “global currency,” as it seems some tweeters and commenters have carelessly represented. There is *already* a world reserve currency, in USD, and as long as it is held in one of the same currencies used for national economies, it is a de facto conflict of interest between international parties.
I guess what I was trying to say is that the UN has no power. Only China, India, Japan, Brazil, Russia, OPEC nations and maybe a few others have any influence in the dollar as the reserve currency.
But the UN is correct in saying that the dollar is in big trouble.
I’m with Curt. I suspect the UN is a toothless tiger with respect to having any direct influence on this topic. That’s not to say that I don’t think the US Dollar will eventually lose its status as the world’s reserve currency – just that when it does happen, it won’t be because of anything the UN says.
Remember, this is the same organization that proposed allowing governments the right to tax emigrants who earn money in other nations.
My $0.02 (after taxes)
Len
Len Penzo dot Com
I was more interested when China brought the topic up but then immediately backed down (convincing Brazil to do the same).
The UN saying it will hardly move the markets (I would think). If China were actually to keep pushing… that would be scary ;)
Good thing they backed down for now! Give it another decade!
You guys have good points. Either way it raises interesting theoretical political issues about “authority” in this case and real vs. nominal authority. UN may be the toothless tiger from some perspectives, but I don’t want to call China a toothless tiger. There may be some bubble in Chinese stocks right now, but China has the goods, just look at how effortlessly their purchases push around gold prices lately.
I was also thinking yesterday that it’s starting to seem anachronous (for me) to still call China an “emerging” market. Aside from a few laws, strictly economically speaking they seem more than just emerging now. Heard yesterday they are also now world’s largest gold producer, if you can believe that!
the dollar is dying because that is what is was created to do. the federal reserve created the dollar to slowly collapse over several decades , the same way any fiat currency will do. the reason china is pushing for a change of the dollar as being used for global trading is because to buy commodities you must first exchange your currency for US dollars and then make the purchase at US based prices. so the world commodity market is screwed for the sole fact that the dollar is worth less and less every day and the prices go up and up. the U.N. is “pushing” for the change as well because the world market is tired of having their currency devalued just to make a purchase. but when you look behind the scenes , the federal reserve , the U.N. , china , brasil , and just about every other country is controlled by the World Bank and the IMF. so all this arguing over currencies to be used is just planned drama. like a soap opera to keep the people angry and confused. WAKE UP YOU IDIOTS! we will continue having global trading problems until we end the FED and create a new currency backed by something that has value and isn’t created by a huge central bank. the money should be created by OUR GOVERNMENT not borrowed from a bank at interest.