China proposed replacing the U.S. dollar as the international reserve currency today, the first step in what could be a broader “dollar downfall” capable of wreaking untold havoc on the American economy.
China’s Central Bank made the recommendation to scrap the current system in an essay on its website, arguing for a new global reserve that isn’t dependent on the currency of any one nation – particularly a nation that’s been acting as crazy as ours has for the last decade.
As we noted earlier today, America has now pledged $13 trillion over the last year in an effort to stop the current recession, although credit markets remain frozen and jobs have continued to hemorrhage.
From the Financial Times:
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.
Wow. Barack’s banker has finally figured it out.
Not only is China expressing grave doubt over America’s ability to pay back its skyrocketing debt, they’re now directly taking aim at the dollar as the global standard-bearer.
Stay tuned … the dollar getting ditched would obviously be one of the biggest financial stories of the decade – and one of the worst for America.
Of course, based on the fiscal policy that’s been pursued by the Bush and Obama administrations, it wouldn’t be surprising if it happens.
By gary March 24, 2009 at 4:39 pm
Congratulations are in order Mr. O!
The financial decimation of the American economy is proceeding as planned.
Your budget proposal is the final nail in the coffin of capitalism!
Well done, comrade. Well done.
Affectionately yours,
George Soros
P.S. Please keep the thermostat above 85 degrees in the Oval Office–you may catch a cold–weather is unpredictable in late March in D.C.
P.P.S Don’t fret about contributing to global warming, it’s a fraud I invented to further ham-string the American economy; the Chicoms and Russos aren’t buying it, thankfully.
By Joey Jo Jo Jr. Shabadoo March 24, 2009 at 9:39 pm
Uh, I’m no economist, but my 1/2 credit in economics from my SC corridor of shame public school leads me to believe that a possible decision by China to either (a) sell US dollars or (b) not buy dollars in order to keep up with the increase in US money supply will help our trade balance, and thus our long-term economic fundamentals. Even the Bush administration pressed China to allow the dollar to fall against the Chinese whatever-you-call-it. Look it up. But by all means, keep the Comrad Obama references coming.
P.S. Is Obama’s veto threat against the AIG bonus taxes also anti-capitalist in your bizarro universe?
By Cooter Brown March 25, 2009 at 6:03 am
Dat’s why ol’ Cooter keeps gold n’ silver burried on da farm. Neber believeded in dat green back lincolnite papaa monie… jest use it ’cause I has toooo. Sell some gold, git some cash, spend it, and grow some more maders, buttabeans, an’ maise (corn to ye scalawags!)… Life is gud!
By Mab March 25, 2009 at 9:46 am
What?! No medicinal herbs in Massa Brown’s patch of Eden?
By gary March 25, 2009 at 9:49 am
Joey jr,
Obama received over 101,000 bucks from AIG and hasn’t volunteered to return it. Neither have co-conspirators Dodd and Frank. So, it’s okay with Mr. O as long has my kids and grand-kids pay for his excesses. Besides, Michelle has probably already spent it on Iranian caviar…
By roofus March 25, 2009 at 1:47 pm
Relax, Joey. We all know Obama is the puppet and Soros is the guy behind the curtain.
What most don’t know about Soros is that he is an unrepentant Nazi collaborator who boasts in his memoirs of betraying neighbors to the SS.
Talk about a moral compass Dems…
By Pat Hendrix March 26, 2009 at 12:38 pm
Nice, roofus, a 13 year old forced to hide his jewish background to labor for Germans equals “collaborator.” I guess all those Jews at Starachowice can be blamed for creating Americans at Utah?
And Joey, the Republicans and Dems received identical donations in 2008. Proving one thing: both parties are owned by the banks and insurance sectors. Term limits is the only answer.
By Pat Hendrix March 26, 2009 at 12:39 pm
God, that post had at least three typos. Should be for “killing Americans at Utah?”