Foreign Economies Pulling Away from America

Tuesday, September 8, 2009 4:12 PM

By: Dan Weil and Julie Crawshaw

The United Nations added its voice to the growing call for an alternative to the dollar as the world’s sole reserve currency.

A United Nations panel has recommended a multilateral currency regime instead. China and Russia have made similar calls in past months.

Meanwhile, profits earned by the top 500 stocks traded in China are higher than the top 500 comparative U.S. stocks for the first time.

The U.N. conference on Trade and Development called for managed, rather than free-floating, currencies.

The U.N. report points out that the dollar’s current role absolves the U.S. of having to make necessary policy adjustments.


Thus, the dominance of the dollar as the main means of international payments also played an important role in the build-up of the global imbalances in the run-up to the financial crisis, the U.N. report stated

Nobel laureate economist Joseph Stiglitz argues that the dollar is indeed in trouble. Gold pushed through $1,000 an ounce over the U.S. holiday on a weaker dollar.

“Higher deficits spark market concerns over future inflation; concerns of inflation contribute to a weaker dollar; and both come together to undermine the greenback’s role as a reliable store of value around the world,â€