Thread: What China's Push for Alternative Currency Means

What China's Push for An Alternative World Reserve Currency Means


by Washington's Blog
Global Research, June 28, 2009
washingtonsblog.com


Yesterday, after China called for a super-sovereign currency, the dollar slid as investors started seeing the writing on the wall. Specifically, the People’s Bank of China said the International Monetary Fund should manage part of members’ foreign-exchange reserves. See this.

“To prevent the deficiencies in the main reserve currency, there’s a need to create a new currency that’s delinked from the economies of the issuers,â€

A global currency is another proposal - one that creates more problems than it solves. The world "is not one nation or one region," and who's to be boss and in charge. Further, if all governments issued the same currency, "the global money supply (would be) vulnerable to irresponsible governments (issuing) too much." Strong ones would end up dominating the weak, and national sovereignty would be weakened, perhaps ended. A "fully dollarized" world is a prescription for trouble enough to make scarcity "the order of the day."

Compared to other world currencies the dollar is not so bad. Not good either, but if a so-called new world currency were created, who is to say it would be any more stable? What would back it up? What would keep it from collapsing during a world-wide economic downturn such as we have now? I believe the reason the world accepted the US dollar as the reserve currency is not because of the stability of the dollar per se, but the stability of the US economy which is what really backs the dollar up. Despite the mess we are in right now, I also believe we still have the world's best overall economy, and once we have worked thru our current woes (and I believe we will) we will be right back on top again. India and China may be showing dramatic growth, but look at where they started from. I think the Chinese understand this, and they are posturing for concessions from the US and the west in general.