EU to Still Support Dollar

Although the United Nations (see U.N. to World: Dump the Dollar), Russia, and China have called for shift away from the US dollar as the world’s reserve currency, the European Union wisely indicated that it us not (now) interested in that:

EU rejects proposal for new reserve currency

EUobserver – March 25, 2009

The EU’s economy commissioner Joaquin Almunia rejected a Chinese proposal for a new reserve currency on Tuesday (24 March), saying he felt the dollar would remain the world’s reserve currency for the foreseeable future.

Mr Almunia said he didn’t envisage: “major structural changes in the role the dollar plays today as a major reserve currency,” following Monday’s call by China’s central bank governor, Zhou Xiaochuan, to create a new reserve currency “that is disconnected from individual currencies.”

“Everybody agrees also that the [main] present world reserve currency, the dollar, is there and will continue to be there for a long period of time,” said Mr Almunia after a meeting of commissioners in Strasbourg reports the Associated Press.

China’s call for a new reserve currency reflects fears that its huge stockpile of dollar denominated US treasury notes, amounting to roughly half of its $2 trillion (€1.49trn) in foreign reserves, is in danger of being devalued.

Last week the US Federal Reserve announced the surprise decision to expand its balance sheet and buy up to $300 billion (€223bn) worth of longer-term US treasury securities.

Mr Zhou made the appeal for a reserve currency that “is able to remain stable in the long run” in an essay published on the People’s Bank of China’s website and included an English translation to ensure an international readership.

In the essay, Mr Zhou proposes that an accounting unit used by the International Monetary Fund known as special drawing rights (SDRs) and which is currently based on a basket of four currencies – the US dollar, the yen, sterling and the euro – should become the new reserve currency.

The proposal suggests expanding this basket of currencies to include all those from the world’s major economies and a system whereby governments could store their reserve SDRs with the IMF. In time SDRs would replace the dollar as the world’s reserve currency says Mr Zhou.

The British economist John Maynard Keynes, whose theory of counter cyclical spending to lift economies out of recession is currently in vogue, proposed a similar scheme in the 1940s.

The move highlights China’s increased willingness to voice its economic opinions on the world stage and comes just ahead of a G20 meeting of the leaders of industrialised and developing nations on 2 April in London where reforming the IMF is firmly on the agenda.

Russia has also mooted the idea of a new reserve currency based on SDRs and has suggested the upcoming G20 meeting is the place to get the ball rolling.

On Tuesday Mr Almunia said that “everybody agrees” over the need to reform the IMF and give developing nations such as China a greater say in how it is run. http://euobserver.com/9/27849

The EU has enough of its own troubles to manage right now without changing this part of international trade.

Plus, what I believe that it is also doing is setting the world up for the time when its currency (currently the Euro) will become the true replacement for the USA dollar. If the EU would have accepted the other proposals this may have elevated other international currencies (which long-term it does not want) and complicated the situation with the USA dollar.

Right now, the EU has shut this down. But the fact that the EU was the one that said no (the USA said it yesterday, but could have been overridden), also shows that the world might essentially ask it again. The time for European dominance is coming. It is prophesied. Events are lining up. But “the end is not yet” (c.f. Matthew 24:6).

But it is getting closer.

Some articles of possibly related interest may include:

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Japan, Its Biblical Past and Future, Part 2: Prophecy Japan in prophecy. What is prophesied for Japan. Will God save the Japanese?
Russia: Its Origins and Prophesied Future Where do the Russians come from? What is prophesied for Russia? What will it do to the Europeans that supported the Beast in the end?
Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, British, Scottish, Welsh, Australians, Anglo-Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo nations? Why might God allow them to be punished first?
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