The Globo
Isaac Hayes - 27 March 2009US Treasury Secretary Tim Geithner let slip that Washington was "open" to the idea of a "super-sovereign reserve currency" run by the International Monetary Fund, even though he had not read plans by China's central bank governor.
Russia, Brazil, and India have backed China on the idea.
China's Communist Party seems to fear that the Federal Reserve is orchestrating a beggar-thy-neighbor devaluation - and a disguised default on America's foreign debt - by resorting to the nuclearoption of printing money to buy US Treasury bonds.
China's proposal is to activate the IMF's power to issue Special Drawing Rights (SDRs).
The SDRs would gradually become an "accepted means of payment". Call it the "globo."
There is no world parliament, no world government. Who would control a super-IMF?
In theory, this world reserve bank would be above politics.The China plan suggests a resource currency along the lines of the "Bancor" floated by Keynes at Bretton Woods.
This was anchored on 30 commodities, giving it far broader base than the Gold Standard.
Such a currency would prevent the "credit-based" debauchery of today's fiat system, says Governor Zhou Xiaochuan hou.
So If the world is running out of oil, metals, freshwater, and arable land , then the price of commodities must rise over time. The "globo" currency would become a deflation machine.
