A Global Currency for a Global Economy: Getting from Here to There

[Dover]

http://www.global-currencies.org/smi/gb/telechar/events/Global-Currency-for-Global-Economy1-1.pdf

Excerpt:

These shortcomings of the gold standard and the high resource cost of storing gold,
would be overcome by an international currency issued and redeemed at a fixed price for
eligible government debt at a price fixed to the market value of a large basket of
internationally traded goods (a Real SDR currency board). Such an international currency
would have a number of important benefits.

a) It would relieve the pressure on the United States to supply dollar assets to satisfy the
demands by other countries for international reserves. In the extreme and over time it
could replace the U.S. dollar as the unit of account, means of payment and store of value
(reserve asset) for international transactions.

b) For countries pegging their own currencies to the Real SDR or using it directly,
international prices would become much more stable, facilitating the further extension of
the gains from trade. A Real SDR could attract a large number of countries to peg the
exchange rates of their currencies to the Real SDR, thus reestablishing a truly global
currency for global trade.

c) Global liquidity would automatically become countercyclical and thus stabilizing.
―This idea (of a commodity standard), which goes back to Keynes’ Treatise on Money,
had interesting countercyclical features: world liquidity would automatically increase
during global business downswings, which tended to depress commodity prices, and
automatically decreased during business upswings, when commodity prices boomed.‖14

Real SDRs issued under these rules would have enormous advantages and minimal risks.
It should be possible to establish sufficient political support to amend the IMF’s articles
to approve such a system. While the United States and the European Union would loose
some of the privileges they now enjoy as a result of being able to borrow and transact
internationally in their own currencies, they would also be relieved of the growing
concern over the sustainability of their growing debt burdens as suppliers of international
reserves.

[Turbineguy]

1. What?

And cause currency speculators to starve? Why they are the most important contributors to our civilization.

[westerebus]

2. The author is a University of Chicago Phd. in economics.

Why is I don't have a lot of faith in anything coming out of that den of inequity?

[blue97keet]

3. A common currency worked out well for the Eu ?

:sarcasm: