U.N. Calls for Replacement of U.S. Dollar

World organizations, including the United Nations, are openly calling for the creation of a one-world currency to replace the dollar – and the Obama administration's trillion-dollar deficits are serving as a trigger for the currency switch, Jerome Corsi's Red Alert reports.

A United Nations report recommended that a new one-world currency should be created to replace the dollar as the standard for foreign-exchange holdings in international trade.

"If the plan succeeds, the United Nations would effectively end up replacing the United States as the issuer of the one-world international currency used as the standard of foreign exchange to settle international trade transactions," Corsi wrote. "The move would obviate the need for any nation state in the future to be the arbiter of world trade, marking yet another blow to national sovereignty on the path to one-world government."

The report, released by the United Nations Conference on Trade and Development, or UNCTAD, endorsed a proposal that Special Drawing Rights, or SDRs, issued by the International Monetary Fund, or IMF, "could be used to settle international payments."

Red Alert has previously reported that Russia and China championed the idea to use the IMF's Special Drawing Rights as a new international currency as a proposal that was adopted by the G-20 meeting held in London last April.

Corsi noted, "That G20 summit meeting took an important step toward creating a new one-world currency through the International Monetary Fund that is designed to replace the dollar as the world's foreign exchange reserve currency of choice."

Point 19 of the final communiqué from the G20 summit in London on April 2 stated, "We have agreed to support a general SDR which will inject $250 billion into the world economy and increase global liquidity," taking the first steps forward to implement China's proposal that Special Drawing Rights at the International Monetary Fund should be created as a foreign-exchange currency to replace the dollar.

The IMF created SDRs in 1969 to support the Bretton Woods fixed exchange-rate system.

"The international supply of two key reserve assets – gold and the U.S. dollar – proved inadequate for supporting the expansion of world trade and financial development that was taking place," a document on the IMF website explains. "Therefore, the international community decided to create a new international reserve asset under the auspices of the IMF."

When the Bretton Woods fixed-rate system collapsed, major world currencies, including the dollar, shifted to a floating exchange-rate system where the price of the dollar and other major world currencies was created by trading on international currency exchanges.

Until the current global economic crisis, SDRs issued by the IMF have been used by IMF member nation states primarily as a reserve account to support international trade transactions, not as an alternative international currency available to settle international debt transactions in danger of default.

"The discussion of using SDRs at the IMF as an international reserve payment system is further evidence that the momentum to create a one-world currency is gaining among not only among academic economists, but also among and professional economists holding prominent government positions," Corsi wrote.

Red Alert previously reported that strong support for the idea of a one-world currency has recently come from Canadian economist Robert Mundell, who won a Nobel-prize in 1999, for his work formulating the intellectual basis for creating the euro.