THE ANCHOR CURRENCY PROBLEM
An accelerated development of the world economy was also predetermined by a close economic integration of different countries. In fact, a tight economic community has been formed. The U.S. dollar now acts as the key international currency and it is this currency that acts as an anchor for many states that are integrated into the world economy.
These countries central banks’ obligations (monetary base in national currency) are reserved by U.S. dollars, which have replaced ‘the gold reserve’. It happened thanks to America’s incontestable success in the development of its own economy and an extensive investment policy in other countries of the world market.
As a result, there appeared a view in the international business community that the U.S.A. is the most reliable and progressive economic system, and the future of the development of other countries; economies are tightly tied to investment injections from America. On top of that, by using the U.S. dollar as the reserve currency, the country obtained the possibility of a closer integration into the world economy and consequently, to use the advantages of the international labour differentiation and its own natural resources more efficiently.
Of course, the economic and financial system of countries which used ‘currency management’ became dependent on the development of the U.S. financial and economic systems. Federal Reserve representatives were involved in exploitation of natural and human resources of its satellite countries. As we have already mentioned, investment support from the IMF and the Federal Reserve, offered in exchange for economic independence, was an emission trick of American financiers, who used the unique quality of investment money - to attain the real commodity content in circulation.
Then the inevitable happened - economies of the international market countries developed so much that the aggregated price of real values they produce exceeded the price of real values produced by the American economy. And again there was a situation similar to the one with ‘the gold standard’ - when one country’s currency cannot value the aggregated price of goods produced by other countries. And no matter how much money the Federal Reserve emits, the situation cannot be changed like it is impossible to turn time back.
Trust in the U.S. dollar in such circumstances inevitably declines, and the issue of international currency modernization arises. It is not important whether new money is printed, or the international currency is based on the U.S. dollar, the core condition is that all states, participants of the international market, are to control money supply. If the U.S. dollar is used as the international currency, America will have to introduce a new currency for the internal payment system operation.
If all states are tied by mutual economic obligations, they will have a lesser opportunity to issue local money without control triggering inflation growth and financial bubbles. The key strategic principle of the international financial system must be the servicing of interest of the civil society needs, not its exploitation (like it happens now).
These countries central banks’ obligations (monetary base in national currency) are reserved by U.S. dollars, which have replaced ‘the gold reserve’. It happened thanks to America’s incontestable success in the development of its own economy and an extensive investment policy in other countries of the world market.
As a result, there appeared a view in the international business community that the U.S.A. is the most reliable and progressive economic system, and the future of the development of other countries; economies are tightly tied to investment injections from America. On top of that, by using the U.S. dollar as the reserve currency, the country obtained the possibility of a closer integration into the world economy and consequently, to use the advantages of the international labour differentiation and its own natural resources more efficiently.
Of course, the economic and financial system of countries which used ‘currency management’ became dependent on the development of the U.S. financial and economic systems. Federal Reserve representatives were involved in exploitation of natural and human resources of its satellite countries. As we have already mentioned, investment support from the IMF and the Federal Reserve, offered in exchange for economic independence, was an emission trick of American financiers, who used the unique quality of investment money - to attain the real commodity content in circulation.
Then the inevitable happened - economies of the international market countries developed so much that the aggregated price of real values they produce exceeded the price of real values produced by the American economy. And again there was a situation similar to the one with ‘the gold standard’ - when one country’s currency cannot value the aggregated price of goods produced by other countries. And no matter how much money the Federal Reserve emits, the situation cannot be changed like it is impossible to turn time back.
Trust in the U.S. dollar in such circumstances inevitably declines, and the issue of international currency modernization arises. It is not important whether new money is printed, or the international currency is based on the U.S. dollar, the core condition is that all states, participants of the international market, are to control money supply. If the U.S. dollar is used as the international currency, America will have to introduce a new currency for the internal payment system operation.
If all states are tied by mutual economic obligations, they will have a lesser opportunity to issue local money without control triggering inflation growth and financial bubbles. The key strategic principle of the international financial system must be the servicing of interest of the civil society needs, not its exploitation (like it happens now).