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Thread: China suggests switch from dollar

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    China suggests switch from dollar

    China's central bank has called for a new global reserve currency run by the International Monetary Fund to replace the US dollar.

    Central bank governor Zhou Xiaochuan did not explicitly mention the dollar, but said the crisis showed the dangers of relying on one currency.

    With the world's largest currency reserves of $2tn, China is the biggest holder of dollar assets.

    Its leaders have often complained about the dollar's volatility.

    China has long been uneasy about relying on the dollar for trade and to store its reserves and recently expressed concerns that Washington's efforts to rescue the US economy could erode the value of the currency.

    His speech was, unusually, published in both Chinese and English, signalling it was intended for an international audience.

    "The outbreak of the crisis and its spillover to the entire world reflected the inherent vulnerabilities and systemic risks in the existing international monetary system," said Mr Zhou in an essay on the People's Bank of China website.

    --snip--

    On Tuesday, the dollar weakened against most major currencies following the announcement of a US plan to buy up toxic debt.

    'Light in tunnel'

    Mr Zhou said the dollar could eventually be replaced as the world's main reserve currency by the Special Drawing Right (SDR), which was created as a unit of account by the IMF in 1969.

    --snip--

    "This confirms that China intends to play fully its role of global economic and political power at the next G20 summit," said Sebastien Barbe, an analyst at French financial service firm Calyon in Hong Kong.BBC Economics Pages
    There's a saying "if America sniffs, the world catches a cold" - so maybe this is the first attempt to disctance the world from the upheavals of the US and its currency. Certainly we followed the US into the disaster of sub-prime mortgages and when that crashed many non US firms that had hitched a ride got caught out really badly.

    This "essay" is also prior to the G20 meeting to be held soon, China is starting to flex muscles and it should be an interesting summit.

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    Re: China suggests switch from dollar

    Not going to happen.
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
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    Re: China suggests switch from dollar

    Not at the forthcoming G20, no: but in 25 or so years? China is still projected to become the world's biggest economy sometime soon so it would make sense from their point of view of having some form of global currency or exchange that wasn't tied to the US alone.

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    Re: China suggests switch from dollar

    Quote Originally Posted by American View Post
    Not going to happen.
    Look at the policies that the Congress and the President are attempting to push to "solve" the economic crisis. How much confidence do you have in the dollar, with this nonsense going on?

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    Re: China suggests switch from dollar

    Quote Originally Posted by Infinite Chaos View Post
    There's a saying "if America sniffs, the world catches a cold" - so maybe this is the first attempt to disctance the world from the upheavals of the US and its currency. Certainly we followed the US into the disaster of sub-prime mortgages and when that crashed many non US firms that had hitched a ride got caught out really badly.

    This "essay" is also prior to the G20 meeting to be held soon, China is starting to flex muscles and it should be an interesting summit.
    It's not so much our currency, it's our consumerism. And changing currency will not give someone a good control over our consumer habits. In the end, I think that China is sitting on a lot of our debt, and our debt is written in our dollar and they're figuring out that it was not the best of deals. But whatever, the dollar will not go away.
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    Re: China suggests switch from dollar

    Quote Originally Posted by Ikari View Post
    -- the dollar will not go away.
    I don't think anyone is implying that - here or in China.

    Even if China becomes number one and India reaches number 2 - the US will still be a major player as Japan and Germany are still nowhere near overtaking the US.

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    Re: China suggests switch from dollar

    An international currency run by the IMF?

    If that happens, I'm buying gold bullion and living in the mountains.

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    Re: China suggests switch from dollar

    Quote Originally Posted by Korimyr the Rat View Post
    Look at the policies that the Congress and the President are attempting to push to "solve" the economic crisis. How much confidence do you have in the dollar, with this nonsense going on?
    Lots more than in Chinese currency that has never ever been a standard because they cheat on its value. The Chinese are really full of **** when you think about it. Let me give you an analogy. The rock bands that have any longevity are those that write their own music. Well the same goes for world powers, those that develop their own technology, and don't just steal and copy are the ones that last. The US and Russia did this throughout the Cold War. China was never a player.
    "He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
    "Fly-over" country voted, and The Donald is now POTUS.

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    Re: China suggests switch from dollar

    Quote Originally Posted by Infinite Chaos View Post
    I don't think anyone is implying that - here or in China.

    Even if China becomes number one and India reaches number 2 - the US will still be a major player as Japan and Germany are still nowhere near overtaking the US.
    Wow think of that, and how great an accomplishment of our legislators driving us down to #3

    I guess it could be worse as some would expect the US to be sliding to the equivalent of a third world nation by the time "they" are done sucking the life out of our wealth, economy and value of our country. At least once we are a nation of the working poor wages will be low enough to start manufacturing here again, and with the rise of various foreign countries in their own wealth there will be plenty of buyers.

    Actually I can not believe no one else picked up this.

    Why do we all so easily accept that our prosperity and future has been sold out from under us? WTF is wrong with everyone?
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    Re: China suggests switch from dollar

    Quote Originally Posted by Korimyr the Rat View Post
    Look at the policies that the Congress and the President are attempting to push to "solve" the economic crisis. How much confidence do you have in the dollar, with this nonsense going on?
    Nonsense?

    Do you mean all the billions being thrown on top of previous billions thereby raping the future of our country and people in a futile attempt to stabilize the investment of the Chinese government in the US?

    Lets not discount the very fact that the whole basis of the bailouts was to protect those who supplied millions in political campaign donations (why only certain specific corporations were bailed out), and help to stabilize not only the global economy but mainly foreign investments in our debt, period.

    Track the money, and find that before all our political leaders found their own opportunity to steal from the American taxpayer in uncountable pet projects (aka more payback to contributors) all the money was going towards ways to get the dollars out of the country.

    It is not too hard to figure out, and with all the power and might we have helped to finance overseas in places like China it is easy to understand their control of our leaders being strong enough to pull this all off.

    The NWO is coming, and we may be in for a very rough ride.
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