Many have discussed the idea of being 'one world' under one set of governing laws. In man's known history many have tried to accomplish this, to our knowledge no one has ever governed or had control over the all the worlds countries. Certainly, no one ruling body has ever had what is approaching seven billion people dependent upon its structure. So I wonder how many of those polled would believe that such a structure actually exists today. Without an election or revolution, slowly over the span of decades, we find ourselves with a "global economy" that would be impossible without a world banking system.
Since the late 60's the world's financial institutions have been brought under the umbrella of one organization slowly but surely. Each countries banking system is a part of a central banking hub overseen by a board of non-elected representatives who head the International Monetary Fund and World Bank (the World Bank being so closely related it can be looked at as a part of the IMF).
The financial crisis of the past few years, gave impetus for some of the most significant reforms in the IMF and its governing body. One of the most interesting was the removal of a few European positions from the board and the inclusion of countries like China, Brazil and India.
"The 10 largest members of the Fund will now consist of the United States, Japan, the four largest European economies (France, Germany, Italy, and the United Kingdom) and Brazil, China, India, and the Russian Federation (the BRICs; see box)."(www.imf.org/external/pubs/ft/survey/so/2010/NEW110510B.htm)
In the 70's the IMF developed an asset unit they dubbed 'Special Drawing Rights' for the top investors in the IMF. Now the IMF is discussing making the SDR's a reserve currency. The current reserve currency is of course the US dollar. Unfortunately, with mounting debt and the lack of political will to impose the needed changes, the US posses a significant risk to the global economy and therefore the world banking system. One of the proposals is for the SDR over time to become a reserve 'currency' of sorts. Rationally speaking, this makes sense as its stability would not be linked to the fortunes or mis-fortunes of any one country.
Factsheet -- Special Drawing Rights (SDRs)
The following was written by John Lipsky, First Deputy Managing Director, International Monetary Fund on March 7, 2011:
Role of the SDR
Another G-20 agenda item is the future role of the SDR in the international monetary system. At its heart, this is a discussion about whether a meaningful degree of multilateral responsibility should exist for the creation of international reserve assets, or whether this instead should result from a combination of market outcomes and bilateral policy choices. As is well known, the proportion of dollars in global foreign currency reserves—at least the part that is reported to the IMF—has declined by about 10 percentage points over the past decade to a little over 60 percent of the total.
If the IMF’s members decide to allocate SDRs in larger quantities, this could satisfy some of the precautionary demand for reserves of emerging markets and others. And SDRs could play a more substantial role in ensuring there is a well-functioning safety net as countries cope with the changing concepts of international liquidity. Another possibility would be for the SDR to expand beyond its current role as an official asset, for example if the IMF or another multilateral agency issued SDR-denominated instruments that could be privately held and traded.
It will be very interesting to watch the IMF over the next months and years, for regardless of any election, those who control the money hold the future of the masses in their hands.
