France's Sarkozy Joins Chorus to End Dollar Dominance
Speaking at the 50th anniversary of the Organization for Economic Co-operation and Development (OECD), France’s President Nicolas Sarkozy laid out his position against the current world monetary system dominated by the “accumulation of dollar reserves.”
Further, he suggested the expanded use of the International Monetary Fund’s Special Drawing Rights (SDR), and — as China and several other nations have already recommended — insisted the renminbi be included in the SDR’s basket of currencies.
According to Reuters:
“French officials have said they hope to encourage greater use of the Chinese yuan as a reserve currency during their G20 presidency, including talks on a possible timetable for its inclusion in the basket of currencies which underpin the International Monetary Fund’s Special Drawing Rights.
“Other ideas include encouraging a greater role for the SDR itself as a reserve currency, in an effort to move away from dollar hegemony. China is keen for the IMF to broaden the currencies that make up its SDR international reserve assets from the current basket of dollars, euros, yen and sterling.
“China wants to promote the use of SDRs for pricing commodities and in global trade. Russia has championed SDRs and recruited fellow emerging heavyweights China, Brazil and India to promote it as a reserve currency.”
As long as the Fed keeps up quantitative easing, the White House folds to tax cuts, and Congress fails to curb spending, faith in the dollar is likely to continue diminishing. The feds may want to believe there’s no alternative to the dollar’s world reserve currency status, but the hunt is on for one… and, a global shift in currency roles could result in US interests getting left behind.
You can read more details in Reuters coverage of how France’s Sarkozy says it’s time to consider the SDR’s role.