06/30/10 Chicago, Illinois – Yesterday, the United Nations released a new report suggesting it’s time to stop using the dollar as the world’s single major reserve currency, noting it has shown “not to be a stable store of value,” and recommending its replacement with the IMF’s currency basket, called special drawing rights (SDRs).
The report came out of the UN Economic and Social Council and, according to Reuters, here’s what they said:
“‘The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency,’ the U.N. World Economic and Social Survey 2010 said. The report says that developing countries have been hit by the U.S. dollar’s loss of value in recent years.
“‘Motivated in part by needs for self-insurance against volatility in commodity markets and capital flows, many developing countries accumulated vast amounts of such (U.S. dollar) reserves during the 2000s,’ it said.
“The report supports replacing the dollar with the International Monetary Fund’s special drawing rights (SDRs), an international reserve asset that is used as a unit of payment on IMF loans and is made up of a basket of currencies. ‘A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency,’ the U.N. report said.”
The UN now joins several vocal critics and nations, especially Russia and China, who have been expressing a strong desire for reserve currency options other than the dollar. Who can blame them? Since the inception of the Federal Reserve the dollar has lost well over 90 percent of its value.
When it comes to stable stores of value, particularly in a time of extreme money printing all over the world, it would make sense to see gold more actively discussed in this type of report. Central banks have certainly noticed gold is beholden to no nation’s printing press and lately have been doing some “peacocking” of their yellow metal assets. Saudi Arabia, for one, recently “restated” its gold reserves… so that they more than doubled in value overnight.
You can read more about the story in Reuters coverage of a UN report on scrapping the dollar as the world’s sole reserve currency.
Best,
Rocky Vega,
The Daily Reckoning
Rocky Vega
Rocky Vega is publisher of The Daily Reckoning. Previously, he was founding publisher of UrbanTurf and RFID Update, which he operated from Brazil, Chile, and Puerto Rico, and associate publisher of FierceFinance. He specialized in direct marketing at MBI, facilitated MIT Sloan School of Management programs, and has been featured on CBS. Vega graduated with honors from Harvard University, where he was on the board of Let’s Go Publications and directed business programs involving McKinsey, Goldman Sachs, and Harvard Business School faculty. He is also enrolled at the Stockholm School of Economics.
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I have also doubled my gold reserves in the last 6 months
Gee, where has the UN been for the last 4500 years? History shows – abundantly – that the only long-term stable store of value is GOLD.
The two great destroyers in the modern economic world are fiat money and fractional reserve banking. We need to abolish both.
They government will take your gold. Count on it.
If you bury it in your backyard – alot of good it will do you.
They could make it punishable by a life imprisonment if they want to.
There will be no running from what’s coming it seems.
“sutski”
Since you have so much of reserve, don’t you worry of the ‘slight dip’ in past few days? Can you sleep well recently? When do you think is your celebration? Haha!
Good luck with your yellow stuff.
Gold, gold, gold. Make me puke. Highway has it right. But then what else is one to do? Its not like we can all stand up and demand the Treasury support the currency and keep it stable. We have let things get way out of hand for anything like real change. Heck, we have no idea from one day to the next what anything is going to be worth. What a rat race.
Tally sticks?
No matter how it dips, gold will eventually emerge champion. For gold, any interim correction in price will prove to be temporary deviation from its upward surge. Don’t worry about having it in your reserve.