Bloomberg reports that a key division of the United Nations wants a global currency (presumably under the contrrol of the U.N.). Somehow, we are supposed to believe that a global monopoly central bank will produce better monetary policy than national monopoly central banks. That is theoretically possible, to be sure. After all, the Italians are better off with the euro than they were with the lira, but that is because the Germans dominate the European Central Bank. One can only imagine what sort of kleptocrats would be in charge of a “global reserve bank.” Moreover, since the same bureaucracy also is promoting restrictions on capital mobility, there is good reason to suspect they are either clueless or malignant. Bloomberg reports:
The dollar’s role in international trade should be reduced by establishing a new currency to protect emerging markets from the “confidence game” of financial speculation, the United Nations said. UN countries should agree on the creation of a global reserve bank to issue the currency and to monitor the national exchange rates of its members, the Geneva-based UN Conference on Trade and Development said today in a report. China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency after the financial crisis sparked by the collapse of the U.S. mortgage market led to the worst global recession since World War II. …“The most important lesson of the global crisis is that financial markets don’t get prices right,” [German Deputy Finance Minister] Flassbeck said. “Governments are being tempted by the resulting confidence game catering to financial-market participants who have shown they’re inept at assessing risk.” The 45-year-old UN group, run by former World Trade Organization chief Supachai Panitchpakdi, “promotes integration of developing countries in the world economy,” according to its Web site. Emerging-market nations should consider restricting capital mobility until a new system is in place, the group said.