World Bank Head Sees Dollar’s Role Diminishing

[PocketProtector]

Now is it just me or if you were POTUS, would you think fixing this would be job #1 ? Unless of course it's what you WANT.

World Bank Head Sees Dollar’s Role Diminishing



By EDMUND L. ANDREWS
Published: September 28, 2009

WASHINGTON — The president of the World Bank said on Monday that America’s days as an unchallenged economic superpower might be numbered and that the dollar was likely to lose its favored position as the euro and the Chinese renminbi assume bigger roles.
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Win McNamee/Getty Images

Robert Zoellick said the Treasury should get more power.

“The United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency,” the World Bank president, Robert B. Zoellick, said in a speech at the School for Advanced International Studies at Johns Hopkins. “Looking forward, there will increasingly be other options to the dollar.”

Mr. Zoellick, who previously served as the United States trade representative and as deputy secretary of state under President George W. Bush, said that the euro provided a “respectable alternative” for financing international transactions and that there was “every reason to believe that the euro’s acceptability could grow.”

In the next 10 to 20 years, he said, the dollar will face growing competition from China’s currency, the renminbi. Though Chinese leaders have minimized their currency’s use in international transactions, largely so they could keep greater control over exchange rates, Mr. Zoellick said the renminbi would “evolve into a force in financial markets.”

The World Bank, which is financed by governments around the globe and lends money primarily to poor countries, has no say over the economic policies of large nations or over currency matters.

But Mr. Zoellick’s comments were unusual, in part because he seemed intent on being provocative. He argued that the United States and a handful of other rich nations could no longer dominate the world economy and suggested that America was losing its clout. He also took issue with a central piece of the Obama administration’s proposal regarding the country’s financial regulatory system.

“The greenback’s fortunes will depend heavily on U.S. choices,” Mr. Zoellick said. “Will the United States resolve its debt problems without a resort to inflation? Can America establish long-term discipline over spending and its budget deficit?”

Mr. Zoellick criticized President Obama’s plan to put the Federal Reserve in charge of reducing “systemic risk” and to regulate institutions considered too big to fail. Saying that Congress had become uneasy about the Fed’s exercise of emergency powers to bail out financial institutions and prop up credit markets, Mr. Zoellick argued that the Treasury rather than the Fed should get more power because the Treasury was more accountable to Congress.

“In the United States, it will be difficult to vest the independent and powerful technocrats at the Federal Reserve with more authority,” Mr. Zoellick said, adding that “the Treasury is an executive department, and therefore Congress and the public can more directly oversee how it uses any added authority.”

[GuyMontag]

Now is it just me or if you were POTUS, would you think fixing this would be job #1 ? Unless of course it's what you WANT.

I think you answered your own question...

[NightRocker]

Does the words, (World Currency) come to mind? They created all of this!

[CarolinaGuy]

I'd say when the VPOTUS has his portfolio in euros that the writing is pretty much on the wall...

[Yellowfin]

It's all about what Sauron-Soros wants, and he tells the guy in the White House what to do.

[dc dalton]

This really has nothing to do with POTUS, plain and simple this is the job of the FED (as illegal as that is and sounds that's the way it works)

I just love the fact you people have to scream "he is screwing us" when in fact you SHOULD have realized by now this is nothing more than the same old politics wrapped in a different wrapper.

The problem is there really is nothing the FED can do at this point. Too many things set up against them (and I have mentioned these a million times here BTW), they are in fact between the "rock and hard place" I (and many others) have been talking about for over a year.

Here's the facts as the FED sees them right now:

1. No way to up interest rates right now with the economy in the shape it is in. If they did they would cause credit markets to become even tighter than they are now.

2. Now easy way to collect the trillions of dollars they have printed and 'thrown' at banks and Wall Street

3. China has already said many times they are pulling back on buying US debt

4. G20 meetings and other recent meetings have had other powers saying the US Dollar will not be the 'center of the universe' within a very short period of time.

5. The FED statements over the past few days hint at (without causing panic in the markets) to the fact they are going to HAVE to drop the dollar by about half over the near future to be able to pay off the debt already incurred. Here's a fairly decent explanation (amazing from MSM BTW) about it: