denominated in the WCU very attractive to savers, who not only enjoy protection against inflation, but also the benefit of diversification of exchange risks. The prospect of these benefits is expected to allow bond issuers to offer a lower interest rate and still attract buyers.

When an increasing number of bonds are issued in WCU, so long as these bonds are issued by entities with good credit standing, they will become an attractive alternative reserve asset for central banks.

Other Potential Uses of the WCU

1 Commodities can be quoted in the WCU.When the prices of commodities such as crude_oil are quoted in US dollars, a depreciation in US dollars usually will lead to a rise in the price of crude oil. But whether there is an increase in the price in real terms is not transparent. Quoting prices in the WCU protects the commodity producing countries as well as commodity consuming countries from unexpected losses due to exchange rate fluctuations. Thus prices of gold, silver, as well as agricultural products can all be quoted in WCU.

2 Assets denominated in the WCU will serve as an excellent reserve asset for central banks, which will then no longer have to worry about exchange losses due to the depreciation of any particular currency.

3 The WCU can serve as an anchor for currencies. A country, typically a small open economy with relatively shallow financial markets, may prefer to tie its currency to the WCU. This way that currency will command stable purchasing power and hence will benefit from stable prices

Source:http://inflationdata.com/inflation/Inflation_Rate/Historical_Oil Pricess_Table.asp

* Note: 1 WCU2000 = US$100 in 2000.