A UN report wants the SDR to replace the dollar in international settlements. This makes the IMF into a world central bank. If the euro is running aground due to Greece, how can a world currency ever survive with each country doing its own fiscal thing? It’s impossible as a matter of political economy without there also being a one-world government that controls the world’s fiscal policy. The people making these proposals do not understand the intimate linkage between the monetary and fiscal measures of any fiat-money State.
It’s unconstitutional for the U.S. to accept such a setup, not that this has ever stopped the government. No administration can accept this without placing Americans under international control. The U.S. power elite will support this if and only if the U.S. maintains control over the SDR and the IMF-central bank. I expect Bernanke and Geithner to resist this proposal and only bargain for control if they see that it is making any real headway. Right now, it’s a paper tiger.
