E 'started the war of currencies, a natural consequence of the inability of the international monetary system to correct the major imbalances in balance of payments. The dollar standard is in crisis. It has allowed the U.S. to spend in excess of what it produces. For years the U.S. has huge current account deficit of balance of payments, which has fueled a net external debt that, in late 2009, reached $ 2,738 billion. China is a downside: it has accumulated large current account surpluses that have fueled a stock of international reserves of $ 2.706 billion, an amount equal to U.S. foreign debt. The Chinese authorities maintain an undervalued renminbi against the dollar, essential piece of their industrial policy. China, however, runs two major risks. The first is that their reserves in U.S. dollar will depreciate against other currencies. This risk is reduced through sales of dollars to buy Euros, with the result that the euro will appreciate in the foreign exchange markets, even though the euro zone current account is in balance. In other words, the Chinese-American trouble downloading on the old continent. The second risk is the specter of protectionism. The U.S. government, backed by Congress, is threatening trade retaliation if China does not reevaluate the renminbi. How to get out? There are four possible solutions.
The first is the flexibility in exchange rates, leaving the foreign exchange to the task of finding their equilibrium values. In this scenario, the dollar should depreciate heavily than the yuan, while China would continue to diversify the currency composition of its international reserves. The euro would be used to appreciate the geography and the industrial world would change to the detriment of the old continent and for the benefit of the new. The second solution is to impose a tax on current account imbalances. The weakness of this proposal is that, in addition to the difficulty of signing such an agreement, the fee would be transformed into a kind of Tobin tax on gross flows of capital movements, already opposed at the international level. In addition, it should decide who should enforce it and how to spend it. The third solution is that countries adhere to an old rule of the game: in the presence of a stagnant world economy, the surplus countries should support the global demand, while in the presence of global inflation in deficit countries should reduce demand. With this rule the external adjustments would be corrected without significant changes in exchange rates. In the current world depression China should assume the role of locomotive, increasing its imports. With the advantage of easing international pressure for a revaluation of the renminbi. But China is no longer reluctant to take on this responsibility. The fourth solution is the root of the fragility of the monetary system International. In the absence of a dominant currency to replace the dollar, it's time to make a qualitative leap forward towards the gradual creation of a supranational currency. We supported this proposal last year ( Il Sole 24 Ore, March 26, 2009), considering that after the financial crisis there would be a currency crisis. As is occurring. China had then expressed a desire to replace the dollar with a supranational currency, declaring himself in favor of the resumption of Special Drawing Rights (SDRs). This proposal was implemented by the G20 in April 2009 in London. Measure that has proved inadequate and insufficient. The DSP (s) are not a supranational currency, but just playing around to use, under certain conditions, the dominant national currencies, (ii) are distributed in an arbitrary manner with respect to the reality of external imbalances, and (iii) have not been successful in the past. A true supranational currency should be born of a cooperative agreement between countries that express the dominant currency. You can create a basket consisting of asset-backed U.S. dollar, euro, yen and renminbi not last, and then turn to the IMF is a multilateral clearing system of payments of the balance between central banks denominated in the new supranational currency. The solution is, in updated form (without gold), the same plan rejected by the Americans Keynes at Bretton Woods in 1944. The current weakness of the dollar requires a measure of responsibility of the leading countries in favor of a supranational monetary management. The supranational regulation of financial markets has been placed on the agenda from the financial crisis. The real risk of war also require the exchange to the international monetary system.
Pietro Alessandrini and Michele Fratianni
appeared in Il Corriere della Sera , October 25, 2010 under the title "The Exit Strategy? A global currency and Region Ticono , November 2, 2010 and entitled "A world currency exchange rates to avoid war."
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