--- In FairfieldLife@yahoogroups.com, "do.rflex" <do.rf...@...> wrote:
>
>
>
> LUXEMBOURG (Reuters) - A U.N. panel will next week recommend that the world
> ditch the dollar as its reserve currency in favor of a shared basket of
> currencies, a member of the panel said on Wednesday, adding to pressure on
> the dollar.
>
> Currency specialist Avinash Persaud, a member of the panel of experts, told a
> Reuters Funds Summit in Luxembourg that the proposal was to create something
> like the old Ecu, or European currency unit, that was a hard-traded, weighted
> basket.
>
> Persaud, chairman of consultants Intelligence Capital and a former currency
> chief at JPMorgan, said the recommendation would be one of a number delivered
> to the United Nations on March 25 by the U.N. Commission of Experts on
> International Financial Reform.
>
> "It is a good moment to move to a shared reserve currency," he said.
>
> Central banks hold their reserves in a variety of currencies and gold, but
> the dollar has dominated as the most convincing store of value -- though its
> rate has wavered in recent years as the United States ran up huge twin budget
> and external deficits.
>
> Some analysts said news of the U.N. panel's recommendation extended dollar
> losses because it fed into concerns about the future of the greenback as the
> main global reserve currency, raising the chances of central bank sales of
> dollar holdings.
>
> "Speculation that major central banks would begin rebalancing their FX
> reserves has risen since the intensification of the dollar's slide between
> 2002 and mid-2008," CMC Markets said in a note.
>
> Russia is also planning to propose the creation of a new reserve currency, to
> be issued by international financial institutions, at the April G20 meeting,
> according to the text of its proposals published on Monday.
>
> It has significantly reduced the dollar's share in its own reserves in recent
> years.
>
> GOOD TIME
>
> Persaud said that the United States was concerned that holding the reserve
> currency made it impossible to run policy, while the rest of world was also
> unhappy with the generally declining dollar.
>
> "There is a moment that can be grasped for change," he said.
>
> "Today the Americans complain that when the world wants to save, it means a
> deficit. A shared (reserve) would reduce the possibility of global
> imbalances."
>
> Persaud said the panel had been looking at using something like an expanded
> Special Drawing Right, originally created by the International Monetary Fund
> in 1969 but now used mainly as an accounting unit within similar
> organizations.
>
> The SDR and the old Ecu are essentially combinations of currencies, weighted
> to a constituent's economic clout, which can be valued against other
> currencies and indeed against those inside the basket.
>
> Persaud said there were two main reasons why policymakers might consider such
> a move, one being the current desire for a change from the dollar.
>
> The other reason, he said, was the success of the euro, which incorporated a
> number of currencies but roughly speaking held on to the stability of the old
> German deutschemark compared with, say, the Greek drachma.
>
> Persaud has long argued that the dollar would give way to the Chinese yuan as
> a global reserve currency within decades.
>
> A shared reserve currency might negate this move, he said, but he believed
> that China would still like to take on the role.
>
> http://www.reuters.com/article/newsOne/idUSTRE52H2CY20090318?sp=true
>
Another page in the effort to create problems here as if we don't do pretty
well on our own. What BS.
