China calls for new reserve currency

Discussion in 'Economics' started by Banjo, Mar 23, 2009.

  1. Banjo


  2. harkm


  3. Could this in any way help the treasury bonds the Chinese already hold? Seems like this would devalue the dollar a lot, perhaps more than the goofy actions our government's already doing. Seems the Chinese are damned to suffer losses on their treasuries no matter what?

    Or, is there something I'm missing and this won't cause weakness in the dollar?
  4. Maybe they ought to meet the new reserve currency. Same as the old reserve currency. :cool:
  5. What's ironic about this call is that the IMF was created by the US, and is pretty much run by the US.

    So, if you look a little deeper, it seems the US powers that be no longer want the burden of being a reserve currency on the dollar.

    They want to be able to freely inflate without affecting the world inflation rate. With the Bancor, or whatever the IMF will create, the US can inflate the dollar and devalue, to help change the US economy from consumer driven to a mixed manufacturing and services economy.

    This falls into place with what china has been doing; ie they are trying to stimulate the domestic chinese consumer, so they are not just an export economy.

    The fed has been trying to figure a way out of the current model of the trade deficit for years. So, it seems they are now trying to solve this so the next growth path is not based on another bubble.

    It may work, or it may collapse the world economy. The world economy is driven by the US consumer, and if they inflate us out of our standard of living, this current problem will be nothing compared to the coming shitstorm. I think they are doing an experiment that they are unsure of the outcome. It could be great, or an all out turd. But since we're in the midst of a massive meltdown, they have the leeway to take this rather large risk.