Dollar days may be numbered, say experts
London,(Prensa Latina)
The Presidents of Brazil and China, Russia and India have already
agreed that a solution to the financial crisis could be to create global
reserves based on a basket of the strongest currencies, putting an end
to the reign of the US dollar.
The London-based economic online news service, Money Morning, alerted
today that while exchange rates may improve again one day, the headlines
on the main economies lead people to realize this is not likely to be
any time soon. The US has gone on a spending spree like no other nation
in history.
The debt, if social security obligations are included goes up to $11
trillion and counting, says Money Morning.Chinese Central Bank Governor
Zhou Xiaochuan has called for a “super sovereign reserve currency” that
would be run by the International Monetary Fund (IMF). Russia, Brazil
and India have backed the idea as well.According to the online news
service, losing the preeminence of the dollar might be healthier for the
global economy in the long run, but it would not be very comfortable for
the US, as it usually countered its debts by printing more new
bills.Money Morning says if the US no longer controls the world’s main
currency, it suggests the loss of the position as the world’s most
important country.“If there’s a lesson from today,” says Chris Turner at
ING Capital Markets, “it’s that the dollar is on thin ice and any loose
talk will be quickly punished.”
At the moment the IMF runs on Special Drawing Rights, which are a
basket of the world’s major currencies. “The IMF would be groomed as the
planet’s central bank”, says The Telegraph’s Ambrose Evans-Pritchard,
“and the SDRs would gradually become an accepted means of payment:”call
it the globo.” Any basket of currencies used to back the “globo”, alerts
Money Morning, would include a far smaller number of dollars than
central banks currently hold in their reserves. |