Lack of confidence in the international monetary system
Under the present international monetary system, countries hold their external monetary reserves partly in gold and partly in foreign exchange. In the past, the latter have consisted mainly of gold-backed dollars and pounds as reserve currencies. The present more complex system requires political as well as economic cooperation and a greater reliance on the 'good intentions' of the USA and its now unbacked dollar. Confidence is very fragile, as both unilateral and regional actions are always possible. A weakening of confidence in the reserve currencies may affect the behaviour of both official and private holders of these currencies, inducing them to convert their existing stock of reserve currencies into gold or into other currencies considered to be stronger. A large-scale conversion of any principal OECD nation's currency into gold would not only tend to reduce the total of existing international liquid reserves, without any reduction in the need for such reserves but, by lowering the reserve assets of the reserve currency countries, might force them to undertake domestic adjustments which would be harmful to the level of world economic activity as a whole. A drastic devaluation, for example, by one of these countries could destabilize world trading patterns.
The present international monetary system remains highly vulnerable to sudden shocks of confidence. Despite the impressive strength of the defences that have been erected against shifts in confidence, the problems of the reserve currency system have yet to be solved. Crises of confidence cause large-scale movements of capital far in excess of the ability of any one country to deal with them by normal means. The system of floating rates of currency lead to improper allocation of the factors of production, anxiety in financial markets, a rise in interest rates and a slowdown in growth. The emergence of the ECU in Europe as a reliable common currency is still problematical as this unit of currency has not had time yet to prove itself .
The Encyclopedia of World Problems and Human Potential is a unique, experimental research work of the Union of International Associations. It is currently published as a searchable online platform with profiles of world problems, action strategies, and human values that are interlinked in novel and innovative ways. These connections are based on a range of relationships such as broader and narrower scope, aggravation, relatedness and more. By concentrating on these links and relationships, the Encyclopedia is uniquely positioned to bring focus to the complex and expansive sphere of global issues and their interconnected nature.
The initial content for the Encyclopedia was seeded from UIA’s Yearbook of International Organizations. UIA’s decades of collected data on the enormous variety of association life provided a broad initial perspective on the myriad problems of humanity. Recognizing that international associations are generally confronting world problems and developing action strategies based on particular values, the initial content was based on the descriptions, aims, titles and profiles of international associations.
Non-profit, apolitical, independent, and non-governmental in nature, the UIA has been a pioneer in the research, monitoring and provision of information on international organizations, international associations and their global challenges since 1907.