http://www.youtube.com/watch?v=4n3g5lUgkWk#t=2m55sWorld Prepares to Dump the DollarWhat do China, India, Brazil, Russia, France and Germany have in common? These countries most often can’t agree on anything. But they are united in one strange—and ominous—way. They blame the United States for wrecking the global economy. And they think the dollar is the wrecking ball.
One rock-solid, foundational belief underpins almost all economic theory in America: faith in the dollar’s unassailable status as the world’s reserve currency. Foreigners hold so many dollars that they can’t afford to stop buying them, the theory goes. Therefore the dollar’s status as the world’s reserve currency is sound. But the dollar is now coming under a concentrated attack. Are American economists about to get schooled?
Has a dollar-killer been minted?Angela Merkel summed up the dollar-skeptic viewpoint last year. “Excessively cheap money in the U.S. was a driver of today’s crisis,” she told the German parliament. And America’s solution—even more cheap money—was just setting the world up for another crisis, she said. It was just a matter of time.
The irony is that America is completely blind to the catastrophe heading its way. As the economic crisis unfolded at the end of last year, investors made a mad rush out of global stock markets and into other assets. The biggest beneficiary of the panic was the one market large enough and liquid enough to handle the trillions of dollars being moved: the U.S. dollar market. This caused the dollar to surge in value.
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America’s foreign creditors are again questioning the wisdom of holding so many U.S. dollars. And they’re looking for a way out.
http://www.thetrumpet.com/?q=6347.4807.0.0 Dumping the dollar: Why it's time to diversifyBut given the manic ups and downs of the dollar in recent years, it may finally be time to diversify the world's reserves. And that's exactly what some central bankers around the globe are now doing.
This comes as a growing number of economists and policymakers are calling to move away from the greenback as the world's dominant currency. A recent United Nations report says the dollar's movements have been too erratic to hold value and the U.N. urges central banks to replace it with anything but a single currency or even multiple-national currencies.
http://money.cnn.com/2010/07/14/news/economy/dollar_reserves_SDRs.fortune/index.htm U.N. committee calls for dumping the U.S. dollarThe U.N. Department of Economic and Social Affairs, in a report, called the dollar an unreliable international currency that should be replaced by a more stable system.
"The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency," the report said.
Countries with massive dollar reserves have seen their funds undervalued as a result of the dollar's troubles and impacted adversely on their import trade.
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The United Nations says it supports the initiatives and hopes that finding alternatives to the dollar will help sustain the international trade and financial systems and allow
less-developed countries to participate more fully into the global economy.
Getting "back on track" will require significant reforms in global economic governance and new thinking to put the world on a more sustainable path of development, said the report.
http://www.upi.com/Top_News/Special/2010/07/01/UN-committee-calls-for-dumping-the-US-dollar/UPI-46531277993911/ Will the G20 Dump the U.S. Dollar as the World's Main Reserve Currency?Jason Simpkins writes: The Group of 20 (G-20) is meeting today (Thursday) and tomorrow (Friday) in Seoul, South Korea, and one of the main topics of discussion will be the role of the U.S. dollar in the post-crisis global economy.
Debate over the dollar's role as the world's main reserve currency rose to a fevered pitch in 2008 when the financial crisis, which began in the United States, first roiled global markets.
Emerging markets – particularly China, which holds some $2 trillion of foreign reserves – bemoaned the dollar's decline as it drained their dollar-denominated assets of value. Food and energy prices have climbed to record highs, as have many foreign currencies, further exacerbating the issue.
The fear among many foreign policymakers is that the United States is intent on further debasing its currency – to the detriment of their neighbors – in an effort to prop up its sagging economy.
Irate over the U.S. Federal Reserve's latest round of quantitative easing, G-20 members have pledged to make the dollar a focal point of discussion at today's summit. Leading the charge has been Brazil, whose finance minister, Guido Mantega, said a basket of currencies that includes the real, yuan, and euro, should replace the dollar as the world's main reserve currency.
"The U.S. economy used to reign absolute, it was the strongest economy in the world and stood out from the others." Mantega said at a press conference in Seoul. "Today that is no longer the case."
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