Friday, January 31, 2014

Former World Bank economist calls for new global currency and end to the dollar

One of the inevitable consequences of a purely fiat currency is that eventually a central bank will inflate and devalue it out of existence for the country it is used in.  However, when that same currency is the world’s reserve currency, then that same inflation can be exported to nearly every nation as they are required to use it for international trade settlement.
Which brings up an interesting point made on Jan. 29 by the former head economist of the World Bank, Justin Yifu Lin, when he calls for an end to the dollar, and the creation of a new global currency.  This new currency, which Lin determines would preferably not be based on a basket of (fiat) currencies, would become a ‘super currency’ that is not controlled by any particular sovereign entity.
 

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