China proposes replacing the US dollar

[Doctor Cynic]

Source: Times

China’s central bank governor has issued a bold proposal to overhaul the global monetary system and one day replace the dollar as the world’s main reserve currency with the International Monetary Fund's (IMF) Special Drawing Right

Zhou Xiaochuan, governor of the People’s Bank of China, argued that what he called a super-sovereign reserve currency would not only eliminate the risks inherent in currencies such as the dollar, which are backed only by the credit of the issuing country and not by gold or silver, but would also make it possible to manage global liquidity.

The Special Drawing Right (SDR) is an international reserve asset created by the International Monetary Fund in 1969 that has the potential to act as a super-sovereign reserve currency, he said.

Careful not to refer explicitly to the dollar, Mr Zhou said: “The role of the SDR has not been put into full play due to limitations on its allocation and the scope of its uses. However, it serves as the light in the tunnel for the reform of the international monetary system."

Read more: http://business.timesonline.co.uk/tol/business/economics/article5961065.ece

[no_hypocrisy]

1. Uh ohhhhh . . . . .

[aquart]

2. This is not good for us, is it?

[TheWatcher]

3. It doesn't matter though because the Dow went up 500 today.

All wee need is Propaganda, cleverly worded Plans and Schemes, "Hopes" "Assurances", Upbeat Rhetoric, Happy Talk, and blindly following and supporting "The Football Team"

Reality No Longer Matters.

Only Perception of Reality.

The Recession is Over.

We will now Ascend Into Heaven.

Praise Marty Moose.

:sarcasm:

[jus_the_facts]

15. While we whistle Zippity DoDa outta our assholes!

:nopity:

[Deja Q]

4. Wasn't there an accusation they were manipulating their currency or quality of goods or something?

They have no clout.

Won't happen.

[wickerwoman]

8. They were pegging the yuan to the dollar

while the dollar was going down to keep the price of their exports and labor relatively low. (They pegged the yuan at 8.2 to the dollar for years even though the actual value of the dollar fell 20-30% purposefully undervaluing their currency to attract foreign investment.) They stopped about four years ago when the dollar started strengthening again and now the yuan is pegged to a basket of currencies (especially the Euro).

Since they own shit loads of our and the rest of the world's debt though, I think they have more clout than you're giving them credit for. And it doesn't make sense for the rest of the world's economies to have to depend on the poorly regulated banking industry of one country.

[Deja Q]

12. Well, if we let an external entity (e.g. the UN) control it...

But all the talk of China holding it all? Ridiculous; they are just as irresponsible. Only in different ways.

[caseymoz]

13. They're not going to give the UN a part of this.

It's going to be Russia and much of the Pacific Rim if anything. It would be damn difficult and risky to implement, but it might just be some kind of message to the US.

[wickerwoman]

23. Who is talking about China holding it all?

They're proposing the IMF. Which is still dominated by the US.

[AndyTiedye]

14. Maybe We Should Return All The Defective Merchandise They Sold Us

That would reduce the debt substantially.

[Davis_X_Machina]

5. Not new. Not breaking

From Reuters,Thursday.

And covered as LBN on Thursday.

[caseymoz]

10. Actually it's news and breaking.

It means our largest currency-holder and creditor has now formally agreed with other nations that they should be holding-- something else. Even a brand new currency, which they say despite the risk and trouble it might entail, it might be worth it.

This is different, but very much related, to the story on Thursday.

What it means is that we are now a hair-trigger away from unmitigated economic catastrophe. If they try it, the dollar is going to sink. If they succeed, expect hyperinflation for at least a year or two as the Chinese dump dollars and the Fed has to reverse and vacuum dollars out of circulation.

[galileoreloaded]

24. Uhhh, actually this is from today. New Article.

http://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html

[lib2DaBone]

6. Uh Ohh.. every one is worried about terrorism......

we owe our lives to China... thanks to CONgress. You aint seen nothin' until the US Dollar collapses.....

I have a GREAT idea..place all CONgess members on the No-Fly list and make them take a weekly drug test.

[BelgianMadCow]

9. Actually, it seems worry about social unrest

has become the n°1 threat to domestic security, overtaking terrorism. New York Times iirc.

[caseymoz]

11. And I don't blame them.

[Pavulon]

7. With something that breaks often and is sold at wal mart (nt)

[kitty1]

16. China to pitch new global currency; dump dollar

Source: Asia-Pacific Times

China is proposing a new international reserve currency controlled by the international monetary fund which would replace the U.S. dollar.


Read more: http://www.ft.com/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html

[tekisui]

17. A Chinese government official was on the radio today saying the dollar

wasn't going anywhere, and that they would keep buying our T-bills for the foreseeable future.

[Deja Q]

19. One could be true, or the other, or maybe both.

Hard to say.

If we are going to be globalized, there are so many ethical ways it could be done. Including a one world currency.

Right now it all feels like a game.

Plus, given how intertwined the economy is, China would lose big-time as well. President Obama is right, though for mid-and long-term global recovery, we still need jobs here. What part do American middle class workers have for the future?

[tomm2thumbs]

18. OH NO, OH NO, OH NO!!!! This will send the stocks to ZERO I tell you. ZERO!

I'm kidding, but isn't sarcasm fun?

The Chinese don't want to do anything that will undermine their own situation and this would do great harm to them.

[corruptmewithpower]

20. I forgot who said that if you owe big enough, you own the bank.

[CLANG]

21. Aw, shit! We are SCREWN!!!!!!!

[madrchsod]

22. ooh nooo! it`s the NEW WORLD ORDER!!!

http://www.youtube.com/watch?v=cJejL_-AZ0o&feature=related

[excess_3]

25. currency-unions between enemies don't usually work .n/t

[Xenotime]

26. Good. Tell me what the currency is so I can move it there. The dollar is crap

[Belial]

27. Gee.. I wonder how many trillions it will cost to reprogram

all the computers.. change all of the price stickers.. :shrug:

[daleo]

28. Interesting development and instructive about how economies really work

This is probably still a ways off, but is a harbinger of things to come.

The U.S. upper class thought it could abandon its working class in favor of cheap labor from China, and get easy money in return. It worked for a while, but it seems like China is now saying "thanks, but we'll take over from here. We can handle things ourselves".

If Barbara Tuchman was alive she could write a new chapter in "The March of Folly".