The Governor of the Bank of England, Mark Carney has proposed a world currency similar to the Libra proposed by Facebook in order to solve or correct the problem created by the US dollar.
Although an incomplete idea, according to the British banker, a world currency would also solve the problem created by the duality between the dollar and the Chinese currency. The proposal was made at the Jackson Hole symposium and according to him the reality of a multipolar world requires a multipolar currency system, with a “hegemonic” synthetic currency that “reflects reliable currencies as a reserve”.
“Libra, the currency launched by Facebook, is the ‘highest profile’ example of an electronic currency,” said Carney, Telegraph reports.
The new currency can also be produced by a network of central banks to be put into circulation according to the principles of Libra, that is, using the network of social media users.
“Something is no longer working in the international financial system. The dollar has become extremely important: many enterprises maintain accounts expressed directly in the American currency. Exchanges therefore no longer succeed in rebalancing the world market. Just look at what happened in the last year. US fiscal policy boosted growth at a time when the US economy was close to full employment. Monetary policy should ‘tighten’ significantly, in compliance with the dual mandate of the Federal Reserve. The resulting dollar and the financial consequences worsened the financial conditions of most other economies, more than their internal conditions would have dictated”, he said.
Trade exchanges based on the dollar have also led to the increase of financial exchanges on this currency with the result that “the world financial cycle is a cycle of the dollar”. Carney has also found the right expression to make the problem understandable, where he modified the statement of the former Secretary of the Treasury, John Connally, “our dollar, your problem”, to “every problem of ours is also yours”. /Telegraph/
