Sunday, March 29, 2009

End Of Dollar Dominance

There is now an important new addition to the list of global currency enthusiast, the Chinese Central Bank. According to the Governor the world needs a common currency managed by International Monetary Fund(IMF).

Leaders of G20 are to meet in London to discuss on the Global Economy along with it they are to discuss the new issue of Global Currency.

As in my previous post(Petro-Dollar) I have emphasised on how the US got hand on the Currency business and how the strength is going down. The report has come somewhat true.

Thats why I usually say:
"Bloggers are never WRONG".

Dollar Dominance is likely to be under threat as world economic power gets disbursed.

According to experts setting an all together new currency wont be that easy. For this to happen, all the countries will have to converge to similar levels of public debt and inflation.

To jump-start a new global reserve currency, economists say, it would require someone effectively subsidizing the cost of bringing buyers and sellers together for the time it takes the currency to get the traction.

Benefits of a global currency would be independence of countries on one separate national currency, because as USA falls the currency may weaken in global market leading to the weakening of other nations(especially Developing) for no fault of theirs.


1 comment:

Shaurya Srivastava said...

Hey vinit,

This is really nice post! Even I was thinking of this and you just wrote on it.

One question:

Why can't we have 2-3 Global Currencies so that if one market fails other can take over? Also, these currencies should have less dependence on others.

Please answer this as soon as possible.

And I like your One-Liner:

'Bloggers are never WRONG'.

Haha. But, please don't become over-confident. You should remain whatever you are and I really like your confidence!!!