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China Calls For New Global Currency To Replace Dollar



Mar 23, 2009 20 Comments ›› Pat Dollard

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Financial Times:

China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.

Analysts said the proposal was an indication of Beijing’s fears that actions being taken to save the domestic US economy would have a negative impact on China.

“This is a clear sign that China, as the largest holder of US dollar financial assets, is concerned about the potential inflationary risk of the US Federal Reserve printing money,” said Qu Hongbin, chief China economist for HSBC.

Although Mr Zhou did not mention the US dollar, the essay gave a pointed critique of the current dollar-dominated monetary system.

“The outbreak of the [current] crisis and its spillover to the entire world reflected the inherent vulnerabilities and systemic risks in the existing international monetary system,” Mr Zhou wrote.

China has little choice but to hold the bulk of its $2,000bn of foreign exchange reserves in US dollars, and this is unlikely to change in the near future.

To replace the current system, Mr Zhou suggested expanding the role of special drawing rights, which were introduced by the IMF in 1969 to support the Bretton Woods fixed exchange rate regime but became less relevant once that collapsed in the 1970s.

Today, the value of SDRs is based on a basket of four currencies – the US dollar, yen, euro and sterling – and they are used largely as a unit of account by the IMF and some other international organisations.

China’s proposal would expand the basket of currencies forming the basis of SDR valuation to all major economies and set up a settlement system between SDRs and other currencies so they could be used in international trade and financial transactions.

Countries would entrust a portion of their SDR reserves to the IMF to manage collectively on their behalf and SDRs would gradually replace existing reserve currencies.

Mr Zhou said the proposal would require “extraordinary political vision and courage” and acknowledged a debt to John Maynard Keynes, who made a similar suggestion in the 1940s.


  • bill-tb

    IMF, no thanks …

  • Roland

    “…John Maynard Keynes, who made a similar suggestion in the 1940s.”

    This endorsement should be enough to kill the idea for anyone who has even been in the same room as a book on economics.

  • Vanessa

    this is not unexpected.
    America the Banana Republic we never wanted to become.

  • Shaun

    So after manipulating the exchange rate between the US Dollar & Chinese currency so you could grow your economy at record rates over the last decade you want to lock in the value of your investment in the US by converting to a unified currency system before the whole thing (US Dollars) becomes worthless.

    Fawk off China you bought it now you have to live with it, just like the rest of us.

    Fkn commies :evil:

  • Dan (San Diego)

    Its not like the USA has a choice…….China ownes us lock stock and barrel……

    If they dump it our dollar will be worth less than a peso……

  • CDTFLINT

    :arrow: Does it count as dropping it if 2bn Chinese “mysteriously” dropp off the face of the planet into a China shaped crater half an hour from now?

    • CPLViper

      Thanks Flint … it is very difficult to type while laughing … :lol:

  • mike3481

    Oh yeah, that’s just fuckin brilliant, ain’t it?

    Government, read Politicians, meddling in the economy got us half way to where we are now.

    And the rest of the way?

    Oh that would be the idea of a Central Bank, which as we’ve all come to learn is a very bad idea because it can be manipulated and not for the public good. And just as importantly because the money is issued WITH debt already attached to it. These are just a couple of reasons why our Founding Fathers were so vehemently against ANY central banking system.

    And now China wants a global currency & turn IMF into a “planet-wide” central bank. :shock:

    Gee-whiz, can’t wait to see who’d control those interest rates. :roll:

    PS – so there’s no confusion, yes, The Federal Reserve System (aka Federal Reserve, aka The Fed) is the central banking system of the United States.

    Bought to you by crooked politicians since 1913. :roll:

  • GRIZZ

    So?Fuck china and their whole GOD denying Aids infested,Stick eating,baby killing,eat anything to get my 1 inch cock hard,mother fuckers

  • Johnny Doe

    Hear hear, Flint.

    “American patriots call for new smoking crater to replace Communist China.”

  • erumuhhh

    we are living in amazing times

  • Sully

    Yet Keynes (and Mao) are where the Chinese and Barry the Red are sympatico.

  • Earlg

    There’s one little characteristic of totalitarian states we sometimes forget, if they don’t like the way something works – say the market, in this case – they simply rewrite the rules and move-on.

    Hillary and Gates, for that matter, should have lumps in their throats the size of Hillary’s fat, ugly ass. The Chinese just fired the first shot, putting us on notice that they and their pals are writing new rules…and oh, yea…the US can go piss-up-a-rope.

    The question is ‘what’s it going to cost?’ because it is going to cost.

    It sure didn’t take long for these guys to figure-out our Clown-in-Chief.

  • http://earthlink nomee1

    fuck these chink basturds. :shock:

  • American Woman

    We knew this was coming. and the added bonus for the libutards…
    They finally get rid of the “IN GOD WE TRUST” that is on our currency, and of course it will be replaced by Owned by China :twisted: :gun:

  • http://myspace.com/natedog1251 nate

    fuck the chinks man :gun: , US Dollar stays!

  • http://www.gwuh.com Marc Stockwell-Moniz (Infidel since birth thanks in part to my crusader ancestors, especially Egas Moniz, Knight Templer who defeated the Moors.)

    Fuck you you chink mother fuckers. :gun: :twisted:

  • ApocalypseNot

    If I held 2 trillion of someone’s debt, and watched that person slowly lose all of my money, I would say the same fucking thing. Bottom line, our government is inept, our corporations are greedy and inept, our banking system made trillion dollar bets on a housing market that was an obvious sham to anyone with half a brain and they lost those bets, and the politicians and corporate titans got rich as they jumped out with their golden parachutes, and now the American taxpayer and the Chinese government is left holding the wheel (tab). It never should have come to this, but the elite bent us over and fucked us, and now we have to pay the piper..

  • ApocalypseNot

    If I held 2 trillion of someone’s debt, and watched that person slowly lose all of my money, I would say the same fucking thing. Bottom line, our government is inept, our corporations are greedy and inept, our banking system made trillion dollar bets on a housing market that was an obvious sham to anyone with half a brain and they lost those bets, and the politicians and corporate titans got rich as they jumped out with their golden parachutes, and now the American taxpayer and the Chinese government is left holding the wheel (tab). It never should have come to this, but the elite bent us over and fucked us, and now we have to pay the piper…

  • Trigger Control

    Give tons of money to stupid dullards who wouldn’t know responsibility if it shit in their cereal bowl. Then bring down the market and sell out to the Chinese. Sounds like a one world government plan to me. Hmmmm guess that makes me a militia member for thinking like that. Get the fucking ropes, lots and lots of ropes!