international trade-the reality

Exchange rates today are decided on the basis of the demand and supply of the various currencies of the world. After Bretton Woods it was unanimously decided that the US dollar would be the reserve currency in international trade in non Warsaw pact countries. Since the US was the largest exporter at that time such an arrangement was in everyone's interest. However the situation today is radically different from the 40s! The share of US non-military exports has been steadily decreasing over the years and countries like China,Russia,Germany,France,Australia,Singapore,S.Korea and Malaysia are today the principal exporters in the world. India is a major player in IT exports. The WTO arrangements have collapsed and there are no guidelines for international trade today and there is tremendous chaos and confusion. Countries like China are artificially manipulating their exchange rates to boost their exports and parking their dollar reserves in US treasury Bonds and investing in real estate and stocks in Europe and the US. There is tremendous volatility in exchange rates and it is creating serious problems for economies like India,Pakistan,Bangladesh,Sri Lanka and Burma who are dependent on oil imports to meet their domestic requirements. This is causing current account deficits,inflation and devaluation of currency. Such a situation cannot be allowed to continue indefinitely because it will ultimately lead to the monopoly by countries like China,Germany,US and the OPEC countries.
If the world economy is to return to a high growth trajectory, It is imperative that the US dollar should be replaced as the reserve currency and a new arrangement which benefits the whole world is introduced. Any further delay could have disastrous consequences

for the world!