COMMENT: We don’t know if this is related to Dominique Strauss-Kahn’s recent arrest for alleged sexual assault, but it sure is what we refer to as “Food for Thought, Grounds for Further Research.”
Did Mr. Strauss-Kahn piss off the “rich and famous”?
EXCERPT: Dominique Strauss-Kahn, managing director of the International Monetary Fund, has called for a new world currency that would challenge the dominance of the dollar and help curb future financial instability.
In a speech in Washington, Strauss-Kahn argued that the reserves that member countries held with the fund could be used, instead of the dollar, to price international trade. These so-called special drawing rights (SDRs) could also act as an alternative to the dollar in central banks’ foreign currency reserves.
“Using the SDR to price global trade and denominate financial assets would provide a buffer from exchange rate volatility,” he said, while “issuing SDR-denominated bonds could create a potentially new class of reserve assets”.
The IMF published a policy paper backing Strauss-Kahn’s views as it gathered top-level economists for discussions on the future of the international monetary system. . . .