Thursday, January 30, 2014

China Daily: Time to "Replace the Dollar with a Supercurrency"

This article in China Daily certainly fits our theme here about keeping an eye out for global monetary system change. It quotes a former World Bank economist as calling for "a single global super currency".

Here are a few good selections from this article. After that we will tie this in to our earlier posts about Klickex and its new GSD cryptocurrency 2.0.

"The dominance of the greenback is the root cause of global financial and economic crises," Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. "The solution to this is to replace the national currency with a global currency."

"Lin, now a professor at Peking University and a leading adviser to the Chinese government, said expanding the basket of major reserve currencies — the dollar, the euro, the Japanese yen and pound sterling — will not address the consequences of a financial crisis. Internationalizing the Chinese currency is not the answer, either, he said."

"Arguments in favor of a global currency resurfaced during October's US budget impasse, which forced the government to shut down."

"It is perhaps a good time for the befuddled world to start considering building a de-Americanized world," a Xinhua News Agency commentary said on Oct 14. The piece argued that creating a new international reserve currency to replace reliance on the greenback, would prevent government gridlock in Washington from affecting the rest of the world."

"In March 2009, China's central bank governor, Zhou Xiaochuan, called for the creation of a new "super-sovereign reserve currency" to replace the dollar. In a paper published on the People's Bank of China's website, Zhou said an international reserve currency "disconnected from individual nations" and "able to remain stable in the long run" would benefit the global financial system more than current reliance on the dollar."

"Pierre Defraigne, executive director of the Madariaga College of Europe Foundation in Brussels, said of Lin's infrastructure proposal, "It is excellent, but the problem is how to implement these plans to link those countries that need such infrastructural construction and those with enough foreign reserves, by using an effective global mechanism."

My commentary: Let's see if I can detect a recurring theme here. Yes I do. A lot people demanding a new global reserve currency (a super currency) not tied to any nation (or even tied to a basket of nations currencies). It apparently needs to be "disconnected from individual nations".

But there is a problem. How to implement all this? We need some kind of "effective global mechanism" to get this done. Where in the world can we find the technology that would give us a global reserve currency not tied to any nation or nations? That seems impossible?

Let me think. What was that Klickex is quietly and steadily working on again? I think it was a new candidate for a "global reserve currency". Something called a GSD. (I remember now, the CEO said "SWIFT loved our idea for a new Global Central Bank.")

It would be not tied to any nation or nations. Something different, Something new. Like the SDR, but better. It's going to be "asset backed". The older, traditional generation will like that. It's also a cryptocurrency. The younger generation will like that (they like Bitcoin). Funny, just by chance it kind of sounds exactly like what all these people are calling for in this China Daily article. Probably just coincidence.

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