Add this Page to Facebook!   Submit to Twitter   Submit to Reddit   Submit to Stumble Upon   Pin It!   Fark It!   Tell A Friend  
Printer Friendly Page Save As Favorite Save As Favorite View Article Stats
1 comment

OpEdNews Op Eds

China Proposes a New International Medium of Exchange

By (about the author)     Permalink       (Page 1 of 1 pages)
Related Topic(s): ; ; ; ; ; ; ; ; , Add Tags Add to My Group(s)

View Ratings | Rate It


Become a Fan
  (32 fans)

opednews.com

"The desirable goal of reforming the international monetary system, therefore, is to create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run."

— Zhou Xiaochuan, head of the People's Bank of China

Zhou Xiaochuan, head of the People's Bank of China, proposed the creation a new international reserve currency in an essay published on the central bank's Web site on Monday. The essay was published both in English and in Chinese, indicating they mean business. Zhou is expected to attend the Group of 20 meeting in London on April 2 where reform of the global financial system is on the table.

For most of the last century, the US Dollar has been the world's standard medium of exchange.  This has been an enormous boon to the US economy, especially in the last 30 years of trade deficits.  No other country in the world would be able to get away with importing more than they export, year after year.  The reason that Americans are able to do this is that other countries use the US Dollar as a medium for trade, so that stockpiling dollars and dollar-valued assets is seen as a safe haven.

The world's ability to absorb more dollars without hyperinflation is huge, but not unlimited.  The Bush Administration has been so profligate and irresponsible in expanding US debt that perhaps that limit is approaching.  China is the biggest foreign holder of dollars, and the nation with the largest US trade imbalance. China has been producing goods for US consumption, and receiving US treasury bonds in return.  In the last few years, China has begun to express doubts about the long-term value in its huge US holdings. 

This week's announcement is a bold next step. It remains to be seen whether China has the economic clout to force a change in the reigning system...or whether she will have to wait until next year.

New York Times article
Market Watch:  Geithner and Bernanke protest the idea

 

http://daily-inspiration.org

Josh Mitteldorf, an editor at OpEdNews, is a scientist specializing in the biology of aging and the evolution of cooperation. Educated to be an astrophysicist, he has branched out from there to mathematical modeling in a variety of areas, including (more...)
 
Add this Page to Facebook!   Submit to Twitter   Submit to Reddit   Submit to Stumble Upon   Pin It!   Fark It!   Tell A Friend
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Follow Me on Twitter

Contact Author Contact Editor View Authors' Articles

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Cold Fusion: Tangible Hope in an Age of Despair

New Scientific Study: Smoking Gun Evidence of 9/11 Explosives in WTC Dust

PayPal cuts off Bradley Manning Legal Defense; Backs Off under Grass Roots Pressure

Chemical Traces of High Explosives in WTC Debris

Madoff : the Story behind the Story

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
1 people are discussing this page, with 1 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

may have been an enormous boon to the owners of th... by Samuel Bryan on Friday, Mar 27, 2009 at 4:09:30 AM