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Sep
16

The transformational challenge of the new US Fed chairperson

Post By gaia1 in American Monetary Matters

This comment was submitted to the NY Times on September 16 when Dr. Summers withdraw his probable nomination by the Obama Administration.

Given that the US Fed in the absence of global central bank is the nearest to a global central bank its new chairperson has the obligation to not only deal with monetary matters at home but also play a leading role in making the unjust, unsustainable and, therefore, unstable international monetary system less unjust, unsustainable and unstable. Optimally this would mean that s/he consider transforming the role of the dollar by not having it play the role of an international currency.

As proposed during the middle seventies and emphasized by the UN Stiglitz commission after the financial collapse in 2009 moving into SDR (Special Drawing Rights) realm would be to the benefit of the US and global economy.

A really transformational international monetary policy for the new US Fed chairperson would be the basing of the international monetary system on the carbon standard of a specific tonnage of CO2e per person. In that way the international monetary system would become stable, just and sustainable. Should the various monetary unions in the USA, South America, Europe, Africa and Asia not begin to discuss the feasibility of a global central bank with its appropriate administrative, regulatory and monetary functions? The conceptual, institutional and strategic dimensions of such carbon-based international monetary system are presented in a recently published book entitled The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation.