IMF Global Currency Master Plan Flies Under the Radar
With the rather ho-hum title, “Reserve Accumulation and International Monetary Stability,” one would hardly expect the dry-sounding April 13th IMF paper to essentially come to the conclusion that the final long-term idea to “mitigate demand and diversify supply of reserves for IMS stability” is to institute a global currency. Where’d that come from? A recent article mines the few months-old IMF paper… to understand how it could be interpreted as the IMF’s blueprint for a global currency.
From the Financial Times Alphaville:
“…in the eyes of the IMF at least, the best way to ensure the stability of the international monetary system (post crisis) is actually by launching a global currency. And that, the IMF says, is largely because sovereigns — as they stand — cannot be trusted to redistribute surplus reserves, or battle their deficits, themselves.
“The ongoing buildup of such imbalances, meanwhile, only makes the system increasingly vulnerable to shocks. It’s also a process that’s ultimately unsustainable for all, says the IMF.”
And, from the IMF report:
“From SDR [Special Drawing Rights] to bancor. A limitation of the SDR as discussed previously is that it is not a currency. Both the SDR and SDR-denominated instruments need to be converted eventually to a national currency for most payments or interventions in foreign exchange markets, which adds to cumbersome use in transactions.
“And though an SDR-based system would move away from a dominant national currency, the SDR’s value remains heavily linked to the conditions and performance of the major component countries. A more ambitious reform option would be to build on the previous ideas and develop, over time, a global currency. Called, for example, bancor in honor of Keynes, such a currency could be used as a medium of exchange — an ‘outside money’ in contrast to the SDR which remains an ‘inside money’.”
Interestingly, “in honor of Keynes” isn’t necessarily a good time… or a worthwhile honor. Yet, there it is, splayed out for all to see… the IMF busily at work on a global currency.
You can read more details in Financial Times coverage of the IMF blueprint for a global currency.