The world needs a super sovereign currency!

The People's Bank of China--Speeches

"When a national currency is used in pricing primary commodities, trade settlements and is adopted as a reserve currency globally, efforts of the monetary authority issuing such a currency to address its economic imbalances by adjusting exchange rate would be made in vain, as its currency serves as a benchmark for many other currencies. While benefiting from a widely accepted reserve currency, the globalization also suffers from the flaws of such a system. The frequency and increasing intensity of financial crises following the collapse of the Bretton Woods system suggests the costs of such a system to the world may have exceeded its benefits. The price is becoming increasingly higher, not only for the users, but also for the issuers of the reserve currencies. Although crisis may not necessarily be an intended result of the issuing authorities, it is an inevitable outcome of the institutional flaws."

The above is an excerpt from the proposal by the Governor of the People's Bank of China presented at the G20 Meetings. A timely proposal and I hope India, Russia and other nations will help carry this to completion. Why? for several reasons.

1. One of the purposes of establishing the IMF was just this. Instead, today it is reduced to the status of a Bully used by certain western nations to threaten everyone else. Especially developing nations (Ok. That was partially a rant, than a sound economic reason).
2. The dilemma of effectively addressing domestic and international demands would not be present in such a super sovereign currency. In other words, the Triffin paradox, which is inherent in the present system can be negated.  
3. Globalization. Somewhere, somehow in the past, the US suceeded in pushing their local currency to the status of the global reserve currency. This doesn't mean it's right. In the face of the current global economic collapse (partially attributable to this monetary system), it is time for the world to say "Enough is enough!".
   
4. The US has benefited from the wide acceptance of it's currency. But the cost bared by the global economy can't be justified. Simply said, bad fiscal policy decisions made by them now have global repercussions. What kind of a twisted system is that?
   

We can spend days arguing about how we arrived at the current situation or we can make a genuine effort to change it. We can argue about how the headquarters of key global institutions such as the UN and IMF ended up in Washington instead of Geneva or we can change it. And if the dissolution of these puppet institutions seems the logical solution, countries like Russia, China and even India should not be afraid to pursue it.