A NEW, MULTICURRENCY WORLD MONETARY SYSTEM IS NECESSARY

Предраг  Јовановић Гавриловић

Authors

Предраг Јовановић Гавриловић Full professor at the Faculty of Economics in Belgrade, retired

Keywords:

International monetary system, gold standard, Bretton-woods monetary system, International liquidity

Abstract

After the break of pure gold standard during World War I, attempts for its reincarnation in the form of gold bullion and gold exchange standard where without any significant success. The rise of USA as the first economic power during inter-war period set the dollar as the most important currency in the international economic transactions.

Dollar has became the pillar of the new, Bretton-Woods monetary system as the main denominator of the value of other currencies and the main source of international liquidity.

The growth of international trade and capital flows requested more and more international liquidity which can be obtained only through the American balance of payments deficit. It is illogical that the currency of a country with permanent deficit be used as an international currency with credibility. Specially now when USA have public debt of over 10.000 billion $ and annual budget deficit of over 400 billion.

To set the platform for a broad and stabile international economic cooperation for nowdays, it is necessary to build the multicurrency world monetary system in which each national currency will take part according to the economic power of related state.

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