UN Wants to Stabilize Global Economy With One World Currency
May 18, 2012
The UN Conference on Trade and Development (UNCTAD) is proposing that the current system of world currencies and capital rules that govern the world’s economy need to be altered in order to stabilize our economic crisis.
The US dollar is the global reserve currency which means all other currencies used for trade must be transferred to their equivalent in US dollars before use as currency on the global markets.
UNCTAD issued a report which is the UN’s answer to this problem. They contend that a Bretton Woods – esque system of universal exchange would allow the central banks to intervene with support or downgrading of currencies already in use.
China, India and Russia and other members of the BRICs non-aligned nations are already using gold with equivalency of their fiat currency to trade amongst themselves for goods and services. This action is greatly affecting the US dollar as the global reserve currency.
UNCTAD wants to see those non-aligned nations, considered surplus nations, cut their imbalances, thereby taking the financial burden off of the UK and US as upholding the global reserve currency.
One way that is proposed by the report is to replace the global reserve currency with a global monetary system.
“Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability,” said Detlef Kotte, one of the report’s authors. “But you will also need a system of managed exchange rates. Countries should keep real exchange rates [adjusted for inflation] stable. Central banks would have to intervene and if not they would have to be told to do so by a multilateral institution such as the International Monetary Fund.”
The American monetary policy has grossly distorted the global economy. The Federal Reserve’s restart called “quantitative easing” is simply a fancy way of saying the Fed will print fiat without precious metals to back it up. This effectively makes the money worthless, yet it is this fiat that is used to purchase government bonds.
Countries like China say that this practice forces their currencies to inflate because of fake foreign capital flooding into the global markets.
A great part of the world’s trade (as foreign-exchange transactions and reserves) are conducted in US dollars.
In this current state, countries must either repair their currencies or clamp down on their domestic monetary conditions.
Under the gold standard, fiat is directly tied to gold, but does not allow for governments to inflate their currencies beyond their actual gold stores.
America has had the most trouble with this system because the Fed deals with inflation which devalues the US dollar without overtly doing so. Since the effects of inflation takes longer to surface, the Fed have enjoyed massive amounts of profits at the expense of the worth and future of the US dollar.
Since the US dollar is the global reserve currency and is also not tied to any precious metal, it is dictated by many exchange-rate and capital controls.
China’s Yuan is greatly undervalued, but influentially tied to the US dollar. The Chinese have been successful at keep their fiat afloat without raising consumer prices.
To control this ebb and flow within the global monetary markets, an international monetary system overseen by the UN through the International Monetary Fund (IMF) or the World trade Organization (WTO) would put the manipulative control over the world’s finances in the hands of an international governing body.
And this is the proposal by the UN.
Economist Ambrose Evans-Pritchard warned about the issue of deflation rather than inflation as the source of the global economy.
In the UNCTAD report Evans-Pritchard said: “In the present situation, with capacity utilization at historic lows and unemployment rising at a dramatic rate, there is little danger of either overheating or wage inflation for several years to come. It is a matter of years, not months, before economies that are now in deep crisis can be restored to a level of capacity utilization where supply cannot keep up with demand, or to a level of employment that could trigger demand for higher wages. This will allow central banks to gradually withdraw excess liquidity by selling revalued assets and absorbing excess money supply. Indeed, deflation – not inflation – is the real danger. Wage deflation is the imminent and most dangerous threat in many countries today, because governments will find it much more difficult to stabilize a tumbling economy when there is a large-scale fall in wages and consumption.”
The UN proposes a complete overhaul. In the report Adapting the International Monetary System to Face 21st Century Challenges , they call for “more intense debate on and reforms to the international monetary system imply that the current system is unable to respond appropriately and adequately to challenges that have appeared, or become more acute, in recent years. This paper focuses on four such challenges: ensuring an orderly exit from global imbalances, facilitating more complementary adjustments between surplus and deficit countries without recessionary impacts, better supporting international trade by reducing currency volatility and better providing development and climate finance. After describing them, it proposes reforms to enable the international monetary system to better respond to these challenges.”
They recommend movement toward a global currency that will replace all current currencies. Revaluation will be accessed and the worth of money would redistribute with oversight of the IMF, WTO and ultimately the UN.
As Kotte points out, “The fear is that the international element of this casino will remain largely untouched. But there is an increased consciousness that future crises cannot be avoided unless there is an overhaul of the financial and monetary system. What is at least encouraging is that, should another crisis happen in the coming years, at least the work is now starting to be done to come up with a superior system with which to replace the existing, battered, misshapen mess that Bretton Woods evolved into over the past few decades.”
This would be the beginning of the UN’s securitization of the world’s monetary value and ability to trade for goods and services.
Whether a country prospered or collapsed would be in the decisive right of the UN. A sort of economic terrorism by effectively controlling the flow.
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