The Inevitable End of the Dollar’s Reign: Le Monde of France
Is the American dollar truly on its way out as the global currency of reference? Many commentators, including Edward Hadas of France’s Le Monde newspaper, regard last week’s deal between China and Brazil to use their own currencies for bilateral trade to mark the beginning of the end for the U.S. dollar as the key currency for global exchange.
For Le Monde, Hadas writes in part:
“The omnipotence of the dollar remains a fact, but China and Brazil have agreed to take a small first step to challenge and then free themselves from it.’
“The idea of a world free of the grip of the dollar is gaining ground. Moscow and New Delhi could join the movement and allow the currencies of the BRIC (Brazil-Russia-India-China) to form the “4 R” bloc (real-ruble-rupee-renminbi). The end of the dollar’s reign may be slow. But it is nevertheless inevitable.”
By Edward Hadas
Translated By Mary Kenney
May 21, 2009
France – Le Monde – Original Article (French)
The omnipotence of the dollar remains a fact, but China and Brazil have agreed to take a small first step to challenge and then free themselves from it.
Beijing and Brasilia have agreed to fix the rates of bilateral trade in their respective currencies – the renminbi (or yuan) and the real. If this test works, the global supremacy of the greenback will be weakened. [Brazil will pay for Chinese goods with reals - and China will pay for Brazilian goods with renminbi].
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One Response to “The Inevitable End of the Dollar’s Reign: Le Monde of France”
Yes, the decline of the U.S. dollar is inevitable. If the world is lucky
and plans ahead, we will avoid a major currency crisis. The next major
realignment of the world's major currencies should be to a common currency
managed by a monetary union central bank. When such a currency supports
countries with 40-50% of the world's GDP, that currency will become the
defacto Single Global Currency, and the “tipping point” momentum will
favor its continued growth, until it supports all the countries of the
world. Thus will come the Single Global Currency managed by a Global
Central Bank within a Global Monetary Union, and the benefits can be
measured in the trillions, annually.
Such a Single Global Currency will provide what the people of the world
want – stable money.
The primary problem for the euro and every regional monetary union
today is that they must still exist in the multicurrency world where
the value of its currency will fluctuate against other currencies.
If 16 countries can use the same currency, why not the 192 U.N.
members? Those 192 countries now use 141 currencies and the number is
dropping annually. The euro is definitely a harbinger of the future,
and
soon all 25 EU members will be part of the EMU, and by then, there will be
more EU members to add. Several of the remaining non-euro EU members are
now seeking admission as soon as possible. The IMF has even
urged several EU members to “euroize” even before completing the standard
accession process.
In addition to eliminating currency fluctuations, the use of a Single
Global Currency would eliminate the current foreign exchange trading
expense of $400 billion annually, eliminate currency risk, eliminate
current account imbalances, eliminate the need for foreign exchange
reserves (now totaling more than $6 trillion); and bring other benefits
worth trillions, such as reducing the impact of global financial turmoil
such as we are now experiencing.
The Single Global Currency Assn. (http://www.singleglobalcurrency.org)
promotes the implementation of a Single Global Currency by 2024, the
80th anniversary of the 1944 conference. That's only 15 years away.
The world is moving toward a Single Global Currency through the
creation, expansion and merger of regional monetary unions. Other
routes are through “ization” (as in “dollarization”and “euroization”)
and international monetary conferences proposals and agreements, such
as were seen at Bretton Woods. The merger of the
eurozone with one or two other currencies is one possible route to a
Single Global Currency.
The challenge now is to reach that goal deliberately, as soon as
possible, with as little cost and as few crises as possible. If the
eurozone were to merge with the U.S. dollar of the yen, or if the yen
and the U.S. dollar were to form a monetary union, the road to a Single
Global Currency would be clear.
The only remaining questions about implementation of a Single Global
Currency are: when? and how much cost and turmoil will the world
endure before that implementation.
See the book, “The Single Global Currency – Common Cents for the World.”
Morrison Bonpasse
Single Global Currency Assn.
Newcastle, Maine, United States