IMF Justifies World Currency

Financial Times lately reported on a story that was missed by most if not all economic pundits when the IMF in April issued a report detailing numerous reasons as to why the world economy would be better served by a single currency.

Under the auspices of re-examining the decades old strategy for maintaining balance in the international monetary system and spurred by recent financial roller-coastering across the board, the International Monetary Fund outlines numerous dangers associated with a build-up in national reserves. Saving just isn’t that popular among Keynesian collectivists it would seem.

The paper opens with the grim news that “…trends in reserve accumulation are symptomatic of imperfections that merit deeper investigation and may need to be addressed over time by policy measures if the system is to support balanced and sustained growth.” And here I was thinking that saving money was a good thing. Obviously I was not alone in that thinking.

This line of thinking is followed by the flexing of their passive muscle with a call for “…voluntary collaboration” of the IMF member nations. ” In particular, members do, under the Articles of Agreement, have an obligation to collaborate with the Fund and with each other on their international reserves policies, with the objectives of promoting better surveillance of international liquidity…”.

Hereafter, the source of this strategy suggestion is nebulously referenced: “The reform ideas presented in this paper are not policy proposals but bring together for discussion relevant strands of thought by academics,  informed observers and policy makers…”

But don’t fret, the IMF is aware that their new round of reforms will not likely happen overnight, “It is understood that some of the ideas discussed are unlikely to materialize in the foreseeable future absent a dramatic shift in appetite for international cooperation.” Now, if we could only generate the same level of interest in a national version of the currently popular nullification movement.

The long and short of this dire warning from the office of central planning is that nations are hording too much and that means there is not enough to go around and bad things happen when there’s not enough money; the market can not survive without more manipulation.

I wonder how many nations are calling them on the fact that the world is in these current dire straits after forty years of being involved in their idea of how the money should flow?

Source: http://www.imf.org/external/np/pp/eng/2010/041310.pdf