U.N.’s Anti-Dollar Talk a Problem of Our Own Making
Currencies / US Dollar Sep 11, 2009 - 06:36 PM GMTBy: Rep_Ed_Royce
A new report from an organization called the U.N. Conference on Trade and Development (UNCTAD) calls for the U.S. dollar to be ditched and replaced with a new global reserve currency. Why is it that the U.N. always concludes that central is better? This discussion, of course, has been prodded by our country's financial crisis and drunken sailor-like spending.
It's not just the U.N. The dollar's standing as the world's reserve currency has been under broad attack. Partly out of nationalist resentment, the dollar has been slapped by the likes of China, Russia, India and Brazil, with calls for its replacement. Now the U.N. has joined those looking to seat the greenback in the cheap seats, for good.
An author of the report - released earlier this week - noted that, "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." Readers should give thought to the un-workability of coordinating so many different political and economic systems. Never mind further empowering an international financial institution. No thanks.
Let's be honest, though. The current path of Washington spending is hammering the dollar.
When I spoke with Federal Reserve Chairman Ben Bernanke earlier this year, he told me that "trillion dollar deficits as far as the eye can see would not be sustainable." Well, budget numbers released last month show that we're rapidly nearing that point. Our budget deficit for this year ($1.6 trillion) will be roughly 11 percent of our GDP -- twice the size of any year since WWII. Earlier this week, President Obama prodded Congress to take over the healthcare sector, another trillion-dollar commitment, economists predict.
Many in the market clearly assume that inflation is around the bend, pressuring the dollar downward, making those now holding greenbacks poorer. The attack on the dollar, and the U.N. silly-talk, is self-invited. We must end our fiscal bleeding.
Rep. Ed Royce
www.edroyce.com
Congressman Royce represents California’s 40th Congressional district. Currently, Representative Royce serves as the ranking member of the House Foreign Affairs Committee's Terrorism, Nonproliferation and Trade Subcommittee. A specialist in international affairs, he also writes the Foreign Intrigue Blog.
© 2009 Copyright Rep. Ed Royce - All Rights Reserved
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