Thomas Fuster

The courage to coexist

A reply to the text by Justin Yifu Lin

A multipolar monetary regime leads to better money

A multipolar monetary regime leads to better money than a supranational single currency. This kind of coexistence even forces the USA to constantly re-earn its monetary supremacy.

The idea of a world currency has been one of the hot topics in economic history. John Maynard Keynes once dreamt of a single global accounting unit. The currency he called Bancor failed due to USA’s opposition at the Bretton Woods conference in fact, where the waters were being tested for the world economic post-war order in 1944. Back then, as probably is also the case today, Washington did not want to sacrifice the supremacy of the dollar and the associated privilege at the altar of a new supranational construct. Decades have passed since then during which the end of the dollar as a global leading currency was often prophesied The fact remains that the dollar still holds the most important position by far in the global economy. Continue reading

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Justin Yifu Lin

P-Gold: A Proposal for a Brave New International Monetary System


The media report about the upcoming review of the SDR composition at the IMF once again attracts the attention about the need to reform the existing international monetary system. The 2008–09 global economic and financial crisis highlighted major deficiencies in the international monetary system. And while the system appears to have weathered the initial shock, it remains fragile. The global imbalances, which triggered the Great Recession, arising from the excess liquidity created by financial deregulation and monetary policy in the United Sates, were so large and lasted so long because of the reserve currency status of the U.S. dollar.

The dollar became the reserve currency in the Bretton Woods system after WWII. For nearly two decades, the dollar maintained fixed exchange rates tied to gold. Then, in the mid-1970s, the tie to gold was broken but the dollar remained as the predominant international reserve currency. Continue reading

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