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U.N. panel says world should ditch dollar
By Jeremy Gaunt, European Investment Correspondent
Wed Mar 18, 2009
LUXEMBOURG (Reuters) - A U.N. panel will next week recommend that the world ditch the dollar as its reserve currency in favor of a shared basket of currencies, a member of the panel said on Wednesday, adding to pressure on the dollar.
Currency specialist Avinash Persaud, a member of the panel of experts, told a Reuters Funds Summit in Luxembourg that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.
Persaud, chairman of consultants Intelligence Capital and a former currency chief at JPMorgan, said the recommendation would be one of a number delivered to the United Nations on March 25 by the U.N. Commission of Experts on International Financial Reform.
"It is a good moment to move to a shared reserve currency," he said.
Central banks hold their reserves in a variety of currencies and gold, but the dollar has dominated as the most convincing store of value -- though its rate has wavered in recent years as the United States ran up huge twin budget and external deficits.
Some analysts said news of the U.N. panel's recommendation extended dollar losses because it fed into concerns about the future of the greenback as the main global reserve currency, raising the chances of central bank sales of dollar holdings.
"Speculation that major central banks would begin rebalancing their FX reserves has risen since the intensification of the dollar's slide between 2002 and mid-2008," CMC Markets said in a note.
Russia is also planning to propose the creation of a new reserve currency, to be issued by international financial institutions, at the April G20 meeting, according to the text of its proposals published on Monday.
It has significantly reduced the dollar's share in its own reserves in recent years.
Persaud said that the United States was concerned that holding the reserve currency made it impossible to run policy, while the rest of world was also unhappy with the generally declining dollar.
"There is a moment that can be grasped for change," he said.
"Today the Americans complain that when the world wants to save, it means a deficit. A shared (reserve) would reduce the possibility of global imbalances."
Persaud said the panel had been looking at using something like an expanded Special Drawing Right, originally created by the International Monetary Fund in 1969 but now used mainly as an accounting unit within similar organizations.
The SDR and the old Ecu are essentially combinations of currencies, weighted to a constituent's economic clout, which can be valued against other currencies and indeed against those inside the basket.
Persaud said there were two main reasons why policymakers might consider such a move, one being the current desire for a change from the dollar.
The other reason, he said, was the success of the euro, which incorporated a number of currencies but roughly speaking held on to the stability of the old German deutschemark compared with, say, the Greek drachma.
Persaud has long argued that the dollar would give way to the Chinese yuan as a global reserve currency within decades.
A shared reserve currency might negate this move, he said, but he believed that China would still like to take on the role.
Lose your property for growing food? (Updated 3/22/09)
MYTH: H.R. 875 "makes it illegal to grow your own garden" and would result in the "criminalization of the backyard gardner."
FACT: There is no language in the bill that would regulate,
penalize, or shut down backyard gardens. This bill is focused on
ensuring the safety of foods sold in supermarkets.
MYTH: H.R. 875 would mean a "goodbye to farmers markets"
because the bill would "require such a burdensome complexity of rules,
inspections, licensing, fees, and penalties for each farmer who wishes
to sell locally - a fruit stand, at a farmers market."
FACT: There is no language in the bill that would result in
farmers markets being regulated, penalized any fines, or shut down.
Farmers markets would be able to continue to flourish under the bill.
In fact, the bill would insist that imported foods meet strict safety
standards to ensure that unsafe imported foods are not competing with
MYTH: H.R. 875 would result in the "death of organic
FACT: There is no language in the bill that would stop organic
farming. The National Organic Program (NOP) is under the jurisdiction
of the United States Department of Agriculture (USDA). The Food
Safety Modernization Act only addresses food safety issues under the
jurisdiction of the Food and Drug Administration (FDA).
MYTH: The bill would implement a national animal ID system.
FACT: There is no language in the bill that would implement a
national animal ID system. Animal identification issues are under the
jurisdiction of the USDA. The Food Safety Modernization Act addresses
issues under the jurisdiction of the FDA.
MYTH: The bill is supported by the large agribusiness
FACT: No large agribusiness companies have expressed support for
this bill. This bill is being supported by several Members of
Congress who have strong progressive records on issues involving
farmers markets, organic farming, and locally-grown foods. Also, H.R.
875 is the only food safety legislation that has been supported by all
the major consumer and food safety groups, including:
-- Center for Foodborne Illness Research & Prevention
-- Center for Science in the Public Interest
-- Consumer Federation of America
-- Consumers Union
-- Food & Water Watch
-- The Pew Charitable Trusts
-- Safe Tables Our Priority
-- Trust for America's Health
MYTH: The bill will pass the Congress next week without
amendments or debate.
FACT: Food safety legislation has yet to be considered by any
=====end update to below info
Big Brother legislation could mean prosecution, fines up to $1 million
Some small farms and organic food growers could be placed under direct supervision of the federal government under new legislation making its way through Congress.
Food Safety Modernization Act
House Resolution 875, or the Food Safety Modernization Act of 2009, was introduced by Rosa DeLauro, D-Conn., in February. DeLauro's husband, Stanley Greenburg, works for Monsanto – the world's leading producer of herbicides and genetically engineered seed.
DeLauro's act has 39 co-sponsors and was referred to the House Agriculture Committee on Feb. 4. It calls for the creation of a Food Safety Administration to allow the government to regulate food production at all levels – and even mandates property seizure, fines of up to $1 million per offense and criminal prosecution for producers, manufacturers and distributors who fail to comply with regulations.
Things you can do
Contact your members at 202-224-3121 and ask them to oppose HR 875 and S 425. While you are at it ask them if they personally have read the legislation and what their position is? If they have not read the legislation ask them to read it and politely let them know that just because other representatives are not reading the legislation and voting on it does not mean they can do the same.
Get in touch with local farmers and food producers by attending a local farmers market and asking them how business is.
Attend a local WAPF meeting, this is a good start to learning about what is going on in farming and local & state initiatives . The website is http://www.westonaprice.org/localchapters/index.html
Check out the Farmers Legal Defense Fund at http://www.ftcldf.org/index.html
Find out who sits on your states agriculture and farming committee and contact them with your concerns.
Continue to contact your elected officials and let them know your position on legislation and why.
Get active at the local and state levels, this is the quickest way to initiate change.
New “Survival Seed Bank”
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