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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: pater tenebrarum who wrote (96962)4/20/2001 4:25:21 PM
From: patron_anejo_por_favor  Read Replies (1) of 436258
 
<<this is imo the beginning of a trend that will become increasingly manifest over the coming year...namely a reweighting of CB reserve composition worldwide.>>

It makes good sense. If only one currency is used as the reserve, there exists the potential (purely theoretically, mind you) that it's CB would abuse that power to run massive current account deficits and create excessive currency, greatly destabilizing the world economy. If two or a basket (say, the G-3) are used, then if one CB becomes lax, the other currency(s) would immediately gain, thus providing the necessary feedback to enforce discipline and permit efficient (currency) markets.

It makes too much sense. Disregard.
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