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Stiglitz's wrong - SDR is not the best alternative to a new global currency!

Comments on Joseph Stiglitz “The best alternative to a new global currency”, 4/04/2011, http://www.businessspectator.com.au/bs.nsf/Article/Stiglitz-US-dollar-yuan-debt-crisis-pd20110401-FH6E9?OpenDocument&src=srch&src=rot

I don't think the title quite reflects the content.

SDR can only be used as an official reserve and that would be perfectly workable if big countries, especially the US, EU countries, China and Japan agreed.

Even for that purpose, there would be a need for how weights of major currencies in the SDR are formed and change with explicit and transparent formula.

However, it would be a very different matter for daily transactions and it cannot be used as a global currency in daily use by ordinary businesses and people if they need to the foreign currencies for businesses or personal transaction needs.

Few people would be interested in holding some SDR for transaction purposes, even though they might be interested and willing to buy it for reserving the value of their assets, just like gold.

Gold is a commodity and is limited in its supply by production and reserves. It also has real world demand for jewellery or some other industrial applications (though seldom used for those). SDR, on the other hand, is a paper currency would be inferior to gold or some other commodities for personal holding.

Those high minded economists should distinguish those two very different roles of currencies.

When they confuse the two, then they create confusions for readers too , or waste readers' time.

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