By Susan Brinkmann, OCDS
Staff Writer

For the first time, the United Nations is joining in the call for a new world currency which will replace the current system of currencies and capital rules which bind the world’s economy.

According a report appearing on News4Press.com, the UN Conference on Trade and Development (UNCTAD) has issued a report stating that the world’s system of currencies is not working properly and is responsible for the financial and economic crises.

The report also called for “wholesale reconsideration” of the current use of the dollar as the world’s reserve currency. China and Russia have already suggested replacing the dollar as the world’s reserve currency, but the UNCTAD represents the first time a major multi-national institution has endorsed the idea.

In essence, the report calls for a new system of managed international exchange rates which would allow central banks to intervene and either support or push down currencies depending on conditions in the global economy.

“Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability,” said Detlef Kotte, one of the report’s authors. “But you will also need a system of managed exchange rates. Countries should keep real exchange rates [adjusted for inflation] stable. Central banks would have to intervene and if not they would have to be told to do so by a multilateral institution such as the International Monetary Fund.”

The UNCTAD’s proposal amounts to the most radical suggestions yet for redesigning the global monetary system.

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