CNNMoney:IMF calls for dollar alternative

[FedUpWithIt All]

NEW YORK (CNNMoney) -- The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency.

http://money.cnn.com/2011/02/10/markets/dollar/index.htm?hpt=T2

This has me very worried. :scared: :scared: :scared: :scared: :scared: :scared: :scared:

I have a bad feeling about all the mutterings regarding a move away from the dollar as the WRC.They have been printing like kids in Kinkos and the possible devaluation scenarios some are mentioning are very very scary.

[Newest Reality]

1. That is an issue for concern,

but it is my view that the time to tremble is if the dollar is ever detached from what I think holds its real value: Petroleum. It is really a petro-dollar. When that happens, it would be a significant reason to fret.

[FedUpWithIt All]

2. Isn't that a likely scenerio if the dollar is removed as the WRC

With the China/Russia agreement a couple of months ago and the meetings between China, Russia, France and the Gulf emirates in 2009 it is easy to anticipate that a move away from the dollar, for oil sales, would not be far off.

http://www.telegraph.co.uk/finance/currency/6263992/Dollars-demise-plotted-by-oil-producers-China-and-France-report-says.html

[Newest Reality]

3. Yes, that's a potential outcome, to me.

The reason I didn't connect the two is because the OP article does not mention the IMF's policy concerning oil trade.

However, if the dollar is significantly decoupled from oil, I think it could be catastrophic to the perceived value of the dollar internationally. Internally, we could have a major financial crises, or considering the systemic problems we face, that might be the straw that collapses the SUV's back.

I'm just relating what I seen about the issue. The experts can deal with the details and counterpoint.

[FedUpWithIt All]

4. I agree that it would be catastrophic.

Interesting times ahead. I cannot see other nations allowing their own economic health to be tied to the dollar for much longer. Not with the way the US has been printing and attempting to push off debt.

Like you, i am no expert but this current news has me feeling more than a little shaky.

:hi: Thanks for the input.

[dixiegrrrrl]

5. Russia and China have done that already.

Saudi Arabia is talking about it.

[FedUpWithIt All]

7. I believe Russia and China are strictly using their own currencies in bilateral trading.

It is still limited. If either nation were to move away from the dollar altogether, it would hurt us badly, i believe. If the entire world were to stop using US currency...:scared:

[dixiegrrrrl]

6. The replacement is called "Special Drawing Rights"

and has been in the works for years,( 1969, actually, but came to the forefront during Bush 2.
Also known as a One World Currency.
And when it was discussed, not that long ago, people called the topic a conspiracy theory.

Dec. 14 (Bloomberg) -- The International Monetary Fund’s Special Drawing Rights can “play an enhanced role” in the global economy as it diversifies away from the dollar , said Isabelle Mateos y Lago, chief of the strategy unit at the IMF’s strategy, policy and review department.

“There is this huge and growing demand for international reserves and a very narrow supply, concentrated in the largest part in the U.S. dollar,” Mateos y Lago told reporters in Moscow today. “This is clearly not sustainable.”

The dollar’s role as the linchpin of the global monetary system has come under attack from some policy makers since the 2008 financial crisis. Zhou Xiaochuan, governor of the People’s Bank of China, has proposed that the International Monetary Fund take over leadership of the global monetary system from the U.S.

http://www.businessweek.com/news/2010-12-14/imf-says-special-drawing-rights-can-play-bigger-role.html

and Joseph Stiglitz was pushing for this "new currency" to happen in Sept. 2009.
( former chairman of the Council of Economic Advisers during the Clinton administration.

"The United States has resisted these changes, but they will come regardless, and it's better for us to participate in the construction of a new system than have it happen without us. The United States has seen great advantages with the dollar as the world's reserve currency of choice, particularly the ability to borrow at low interest rates seemingly without limit. But we haven't seen the costs as clearly: the inevitable trade deficits, the instability, the weaker global economy. The benefits to us are likely to shrink, and rapidly so, as countries shift their holdings away from the dollar.

It is happening already, and the process is likely to accelerate. Chinese authorities, for example, have openly expressed concerns about the value of the country's vast dollar reserves. Not surprisingly, China and other nations holding lots of U.S. debt support efforts to build a new system."

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/28/AR2009082802111.html

[FedUpWithIt All]

8. Thanks for sharing this.

I didn't know what "Special Drawing Rights" were.

[cutlassmama]

9. This will be the beginning of the end. Scary times ahead

[jtuck004]

10. Don't spill your beer over this.

"Fred Bergsten, director of the Peterson Institute for International Economics, said at a conference in Washington that IMF member nations should agree to create $2 trillion worth of SDRs over the next few years.

SDRs, he said, "will further diversify the system."

So they are going to create "$2 trillion" of some virtual piece of paper based on a basket of real currency -

an index

And this is going to replace the dollar. Uh huh.

On the other hand, people who want to trade with the U.S. for, say, big planes, military stuff, a few other oddities, and perhaps wheat, will need to pay in a currency that our government accepts for U.S. taxes.

That is the one an' only U.S. Dollar.

Not being a smartass - Do you know how much value there would have to be in those "virtual pieces of paper" to replace our trade, much less enough to virtually for real disprupt our economy economy today? I think I do, and there is no serious discussion over creating enough to do that yet that I can see.

Small, itty bitty things.

On the other hand, there is not enough work for 27 million + people to live on, we are gonna have another record foreclosure rate this very year, and 40 million people (also a new record) are on food stamps (from which J.P. Morgan makes some sum of money, it seems. Why?).

For those people life is not going to get much worse for a while - because we still have to lose all we have for them to actually do worse, and some of them will do better when we do.

Again, just so I can be clear, what what, specifically, do you see happening? What would be the mechanism, and exactly what do you see changing? Most everyone things the volatility in the market will subside when we get the dollar the hell out of there.
Rather than anything being worth less, it just may not have the peaks and valleys.

How do you see life changing in the U.S. if that happens?

[Art_from_Ark]

11. A comment about your comment

You wrote: "On the other hand, people who want to trade with the U.S. for, say, big planes, military stuff, a few other oddities, and perhaps wheat, will need to pay in a currency that our government accepts for U.S. taxes.

That is the one an' only U.S. Dollar."

So what if they demand that Uncle Sam pays for their exports in "a currency that their government accepts for their taxes", that is to say, NOT the US dollar?