China calls for new world reserve currency
Tue, 24 Mar 2009
Last week, Wednesday, the Federal Reserve, currently in charge of regulating the world’s money supply, announced a plot to flood the world with $1.5 trillion US — a sum corresponding approximately exactly to China’s entire dollar holdings.
This little move basically cut the value of China’s holdings in half. Badabing. Presto chango. Except, of course, it’s not half of China’s holdings because the Fed’s new funny money iLast weeks draining everyone’s dollar holdings of value. But you get the picture, and so did China.
So yesterday, Monday, China’s Central Bank posted a document on their web site, in English and Chinese, calling for a new global reserve currency.
Rumor has it the BRIC bloc is in tow.
[Posted By microdot]
By Andre Damon
Republished from World Socialist
Chinese central banker says US dollar should be replaced as global reserve currency.
The head of the Chinese central bank Monday called for the replacement of the US dollar as the global reserve currency.
The Chinese authorities hold some $2 trillion in foreign reserves, two thirds of which is placed in US assets.
On Wednesday, the Federal Reserve introduced a huge money creation scheme, by means of which central bank would buy $1.15 trillion in securities. The Fed’s announcement amounts to a declaration that it will create enough money to purchase assets with a value approaching the entire dollar holdings of the Chinese central bank.
Last week, Reuters reported that a source within the Russian government told it that Russia, China, Brazil, and India have secretly discussed moving from the dollar reserve.
“They [China] did not formally put forward their position for the G20 summit [of financial ministers earlier this month] but unofficially they had distributed their paper regarding the same ideas [the need for the new currency],” the source told Reuters. The more-developed nations were “allergic” to the idea, said the source.
Russia possesses the world’s third-largest store of foreign reserves, about half of which are in dollars.
Chinese central banker says US dollar should be replaced as global reserve currency