IMF calls for world currency.
Discussion
Please fasten tin foil head gear before proceeding:
"Dominique Strauss-Kahn, managing director of the International Monetary Fund, has called for a new world currency that would challenge the dominance of the dollar and protect against future financial instability.
“Global imbalances are back, with issues that worried us before the crisis - large and volatile capital flows, exchange rate pressures, rapidly growing excess reserves - on the front burner once again,” Strauss-Kahn said. “Left unresolved, these problems could even sow the seeds of the next crisis.”
“When we worry about the deficiencies of the international monetary system, we are mostly worrying about volatility,” he added. There is “a sense that money sometimes flows around the globe in too-volatile a fashion and that countries need a more stable, more predictable external environment in order to prosper”, he said.
Strauss-Kahn saw a greater role for the IMF's Special Drawing Rights, which is currently composed of the dollar, sterling, euro and yen, over time but said it will take a great deal of international cooperation to make that work.
"Using the SDR to price global trade and denominate financial assets would provide a buffer from exchange rate volatility," Strauss-Kahn said, while "issuing SDR-denominated bonds could create a potentially new class of reserve assets".
http://www.telegraph.co.uk/finance/currency/831683...
He suggested adding emerging market countries' currencies, such as the yuan, to a basket of currencies that the IMF administers could add stability to the global system.
"Dominique Strauss-Kahn, managing director of the International Monetary Fund, has called for a new world currency that would challenge the dominance of the dollar and protect against future financial instability.
“Global imbalances are back, with issues that worried us before the crisis - large and volatile capital flows, exchange rate pressures, rapidly growing excess reserves - on the front burner once again,” Strauss-Kahn said. “Left unresolved, these problems could even sow the seeds of the next crisis.”
“When we worry about the deficiencies of the international monetary system, we are mostly worrying about volatility,” he added. There is “a sense that money sometimes flows around the globe in too-volatile a fashion and that countries need a more stable, more predictable external environment in order to prosper”, he said.
Strauss-Kahn saw a greater role for the IMF's Special Drawing Rights, which is currently composed of the dollar, sterling, euro and yen, over time but said it will take a great deal of international cooperation to make that work.
"Using the SDR to price global trade and denominate financial assets would provide a buffer from exchange rate volatility," Strauss-Kahn said, while "issuing SDR-denominated bonds could create a potentially new class of reserve assets".
http://www.telegraph.co.uk/finance/currency/831683...
He suggested adding emerging market countries' currencies, such as the yuan, to a basket of currencies that the IMF administers could add stability to the global system.
Why not make Monopoly money legal tender, every household is used to it! (as he pulls out the 5 sets he has stuffed under the stairs cupboard) 
WhoseGeneration said:
Hmm, who authorised this statement?
There's a sense of "socialism" in this.
"Mr. Strauss-Kahn was a leading member of France's Socialist Party"There's a sense of "socialism" in this.
It looks like he's going to run for the French Presidency as a Socialist too. His term ends this year at the IMF, so perhaps 'there is no such thing as bad publicity' is coming into play.
A single currency will be in use at some time sooner or later. The world is getting smaller and cross border trade is pretty much becoming as common as trade within borders, but trading using a whole load of different currencies for every transaction is hardly the most efficient method of doing business.
Its like if you imagine that each state of the USA had its own currency - it would not function as effectively and efficiently as it does today under a single currency.
It may not happen soon, but to deny history repeating itself is a bit silly. The world will operate under one currency at some stage, no doubt.
Its like if you imagine that each state of the USA had its own currency - it would not function as effectively and efficiently as it does today under a single currency.
It may not happen soon, but to deny history repeating itself is a bit silly. The world will operate under one currency at some stage, no doubt.
Shay HTFC said:
A single currency will be in use at some time sooner or later. The world is getting smaller and cross border trade is pretty much becoming as common as trade within borders, but trading using a whole load of different currencies for every transaction is hardly the most efficient method of doing business.
Its like if you imagine that each state of the USA had its own currency - it would not function as effectively and efficiently as it does today under a single currency.
It may not happen soon, but to deny history repeating itself is a bit silly. The world will operate under one currency at some stage, no doubt.
I think (or at least hope) that we'll never see a single currency, for several reasons:Its like if you imagine that each state of the USA had its own currency - it would not function as effectively and efficiently as it does today under a single currency.
It may not happen soon, but to deny history repeating itself is a bit silly. The world will operate under one currency at some stage, no doubt.
1) Various parts of the world are at war with eachother at any given time, so are unlikely to agree to have the same currency as their enemy.
2) People will hopefully realise that signing up to a single currency effectively gives away some of your country's key financial controls to a third party. Just ask the Germans or Irish how popular the Euro is right now.
Having many currencies in the world has its costs for sure, but for me the costs of a single currency are greater.
Shay HTFC said:
A single currency will be in use at some time sooner or later. The world is getting smaller and cross border trade is pretty much becoming as common as trade within borders, but trading using a whole load of different currencies for every transaction is hardly the most efficient method of doing business.
Its like if you imagine that each state of the USA had its own currency - it would not function as effectively and efficiently as it does today under a single currency.
It may not happen soon, but to deny history repeating itself is a bit silly. The world will operate under one currency at some stage, no doubt.
That sounds logical; however, it seems that said currency would be difficult to manage fairly without someone in charge making decisions (or being accused of making decisions)that favor one nation or the other. Thoughts?Its like if you imagine that each state of the USA had its own currency - it would not function as effectively and efficiently as it does today under a single currency.
It may not happen soon, but to deny history repeating itself is a bit silly. The world will operate under one currency at some stage, no doubt.
Jimbeaux said:
That sounds logical; however, it seems that said currency would be difficult to manage fairly without someone in charge making decisions (or being accused of making decisions)that favor one nation or the other. Thoughts?
True. It would only work with very close cooperation between nations ala the Eurozone.I think more realistically we would start to see other 'eurozones' popping up around in places like Africa and Asia that would create power currencies in those parts of the world.
However, I think that ultimately (I'm talking about maybe in 100s of years) that the world will be just one big nation with one big currency. Globalisation will see to that.
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