China wants global currency

[Gangularis]

This is going to make the NWO conspiracy theorists' heads spin..

http://www.foxnews.com/politics/first100days/2009/03/23/china-takes-aim-dollar-urges-new-global-currency/

[brumsen]

Why, exactly? I see no conspiracy.

[Darat]

Anyone got a link to the actual essay (in English!)? I can't find one.

[brumsen]

The above link is to a piece in English. What are you talking about?

ETA: Ah, I suppose you mean mr. Zhou's essay. Dunno where to find it either.

[Darat]

Found it - it's listed as a speech: http://www.pbc.gov.cn/english//detail.asp?col=6500&ID=170

[Darat]

Interesting speech, on the level of the speech it seems to be a sensible proposal.

(Oh and is Keynes going to be canonised? ;) )

[Gangularis]

Why, exactly? I see no conspiracy.

I'm not saying it's a conspiracy, but NWO conspiracy theorists believe we will have a world currency as part of a one world (dictatorial/communist) government. So here we have China stepping up to the plate on that front.

[brumsen]

Well, I've been accused of being a conspiracy theorist - but frankly this strikes me as far-fetched.

[Free Thinkr]

Well, I've been accused of being a conspiracy theorist - but frankly this strikes me as far-fetched.
*shrugs*

It's not far-fetched when you're talking to someone who thoroughly believes the Twin Towers fell due to nanothermite planted by government agents.

[hamelekim]

I wouldn't be laughing at those who says a world currency is coming. Many world leaders are now calling for it, and now you have the US Treasury Secretary say that he would essentially consider it.

This differs from his previous statement where he completely denounced the idea.

It makes you wonder what he really thinks, and what he says for public consumption.

http://online.wsj.com/article/BT-CO-20090325-708398.html

NEW YORK (Dow Jones)--The dollar declined to session lows against the euro and yen after U.S. Treasury Secretary Timothy Geithner said he was open to considering a new global reserve currency.

The issue of a new global reserve currency to replace the dollar has caught steam lately, after both China and Russia proposed expanding a Special Drawing Rights, or a currency issued by the International Monetary Fund. An independent expert panel convened by the United Nations is also expected to recommend an expanded SDR this week.

Geithner said he hasn't yet read China's proposal, but that he was open to considering expanding an SDR. He added that the dollar's future role will be determined by good U.S. policy.

This contradicts comments he made Tuesday, when along with Federal Reserve Chairman Ben Bernanke, he denounced the idea.

The dollar has been the world's reserve currency since the end of World War II. Major commodities, namely oil, are priced in dollars, and global companies do business in dollars, leading wealthy central banks to prefer to hold dollars to protect against crisis. But, as the U.S. manages the effects of the global financial meltdown by expanding its monetary supply and weakening the value of dollar-denominated assets, some of the U.S.'s largest creditors have grown unhappy as the value of their reserves decline.

Earlier Wednesday, U.K. Prime Minister Gordon Brown said in remarks that there will be no discussion on a new reserve currency at the upcoming Group of 20 summit.

The euro recently climbed to a fresh intraday high of $1.3653 from $1.3465 before Geithner's comments. The dollar also fell to a session low of Y96.90.

[Puppycow]

This is just evidence of China's impotence.
Form the article in the OP:
However, the technical and political hurdles to implementing China's recommendation are enormous, so even if backed by other nations, the proposal is unlikely to change the dollar's role in the short term. Central banks around the world hold more U.S. dollars and dollar securities than they do assets denominated in any other individual foreign currency. Such reserves can be used to stabilize the value of the central banks' domestic currencies.
. . .
Chinese officials are frustrated at their financial dependence on the U.S., with Premier Wen Jiabao this month publicly expressing "worries" over China's significant holdings of U.S. government bonds. The size of those holdings means the value of the national rainy-day fund is mainly driven by factors China has little control over, such as fluctuations in the value of the dollar and changes in U.S. economic policies. While Chinese banks have weathered the global downturn and continue to lend, the collapse in demand for the nation's exports has shuttered factories and left millions jobless.

We got 'em by the short 'n curlies. :D

[Father Dagon]

China is like the last country in the world that should propose a gobal currency. Hell, even the Euro is a better bet. (At least the criminals think so.)

[hamelekim]

This is just evidence of China's impotence.
Form the article in the OP:


We got 'em by the short 'n curlies. :D

It goes both ways. If China stops buying US debt and they start getting out of US dollars the US economy would collapse.

Personally I think that China, Russia, and a few other countries are trying to let the US collapse while protecting themselves somehow so they can come out in a better position after this economic collapse is all said and done.

[hamelekim]

China is like the last country in the world that should propose a gobal currency. Hell, even the Euro is a better bet. (At least the criminals think so.)

Why is that? Jim Rogers and others think that it will be the next big thing. Asia is certainly rising while the west is falling.

[bobrayner]

We got 'em by the short 'n curlies. :D
Yeah, all we have to do is massively devalue the dollar, and China could lose much of its reserves. USA wins! ;)

China is like the last country in the world that should propose a gobal currency.
The proposal is not about the RMB though; it's about SDRs. Also, China isn't proposing a new global currency; it's proposing a change to how an existing global currency is used (SDRs have been used in rather specialist roles for decades (http://fx.sauder.ubc.ca/SDR.html)). Did you read the proposal (http://www.pbc.gov.cn/english/detail.asp?col=6500&id=178)?

Hell, even the Euro is a better bet. (At least the criminals think so.)
Euros are already in the SDR "basket".

[bobrayner]

If China stops buying US debt and they start getting out of US dollars the US economy would collapse.
Why do you think that? Chinese investments (mainly in treasury securities) have pushed down bond yields and pushed up the dollar; it's reasonable to believe that if China stopped buying any more then bond yields would rise (maybe by 1%! shock horror!). This would definitely be painful, but how would it cause an entire economy to collapse?
Personally I think that China, Russia, and a few other countries are trying to let the US collapse while protecting themselves somehow so they can come out in a better position after this economic collapse is all said and done.
Why do you think that? Surely they'd suffer more from some hypothetical collapse of the US economy?

[Puppycow]

It goes both ways. If China stops buying US debt and they start getting out of US dollars the US economy would collapse.

Personally I think that China, Russia, and a few other countries are trying to let the US collapse while protecting themselves somehow so they can come out in a better position after this economic collapse is all said and done.

The US was a wealthy country long before China started financing its debt. China has become wealthy by exporting to the US, but the US wealth had little to do with China. Most of it already existed. Yes, the US would be hurt, but China itself would be hurt even worse.

[Puppycow]

Yeah, all we have to do is massively devalue the dollar, and China could lose much of its reserves. USA wins! ;)

That would fix our trade deficit. The US was once the world's factory. There's lots of latent production capacity in the US. The rust belt could be reinvigorated. Manufacturing jobs would return to the US.

[bobrayner]

That would fix our trade deficit.
Yes; largely by making it very difficult to import many of the things that people and businesses in the USA want. :D

The US was once the world's factory. There's lots of latent production capacity in the US. The rust belt could be reinvigorated. Manufacturing jobs would return to the US.
What's so special about the rustbelt and manufacturing jobs? The USA's comparative advantage lies elsewhere.

[GreNME]

China is proposing any such thing. A Chinese person has suggested that the dollar-- a (not the) current global currency-- no longer be the de facto global currency to invest in, and is suggesting that nations like China and Russia divest of their US bonds and invest in something else. Completely different story than what conspiracy theorists would want to believe and actually a bigger discussion topic than the corny conspiracy stories anyway.

[Puppycow]

Yes; largely by making it very difficult to import many of the things that people and businesses in the USA want. :DYes, there would be a tradeoff. But while I am absolutely for free trade, I think it should be more balanced by allowing currencies of net exporters to rise over time and those of net importers to fall over time so as to balance out in the long run. This is prevented when one country pegs its currency to another's and then creates an asset bubble in the other country by buying too much of its assets to manipulate its own currency.


What's so special about the rustbelt and manufacturing jobs? The USA's comparative advantage lies elsewhere.True, but if the currency was weaker, that would increase the USA's comparative advantage in manufacturing. China's comparative advantage is partly because it keeps its currency pegged artificially low compared to the basket of currencies including the dollar that it pegs to.

As far as what's so special about the rustbelt and manufacturing jobs, it is only that we have a lot of now unemployed people in those geographical areas and sector of the economy. I am also concerned that unskilled or low-skilled workers are going to be increasingly left behind by economic progress. Pretty soon, all such jobs will be able to be performed by robots. Robots will drive trucks (actually, the trucks will be unmanned drones) and fly planes (ditto. The 9000 series is the most reliable computer ever made. No 9000 computer has ever made a mistake or distorted information. We are all, by any practical definition of the words, foolproof and incapable of error.) and do most of the manufacturing work. The only jobs left will be very high-level jobs. I just think that there are lots of people who will never be a successful novelist or artist or scientist or investment banker or lawyer or other high-skill career, which is why there's going to be a shortage of jobs in the future. (So, this would probably only be a temporary respite for workers in the manufacturing sector).

[mhaze]

The medium term impact of technological accelerando should be more of the already perceived trends of greater world wealth, better information flow, less reliance on government by the individual, and lower demand for money sponsered by goverment. Traditional administration and legislative process can't begin to keep up with the rate of change.

[hamelekim]

The US was a wealthy country long before China started financing its debt. China has become wealthy by exporting to the US, but the US wealth had little to do with China. Most of it already existed. Yes, the US would be hurt, but China itself would be hurt even worse.

The entire world would be hurt by the collapse of the US as the world consumer. That doesn't mean that the world would stop, things would change, and I don't see the cheap labour of china going away anytime soon. Corporations would continue to shop their factories to china, and other people would buy the goods provided.

Just remember that China is prepared to let several cities die in a nuclear exchange if they came out on top. I wouldn't put it past them to be planning a way to survive a US collapse at this moment.

[hamelekim]

The medium term impact of technological accelerando should be more of the already perceived trends of greater world wealth, better information flow, less reliance on government by the individual, and lower demand for money sponsered by goverment. Traditional administration and legislative process can't begin to keep up with the rate of change.

Greater Wealth for the top 5%, more specifically the top 1%. We have higher productivity today, yet work the same number of hours. We have more wealth, but it is in fewer hands. We have more reliance on government because people have less money and time.

[Childlike Empress]

I recommend reading the following three-part analysis "Dollar Crisis in the making":

http://www.atimes.com/atimes/Global_Economy/KC14Dj04.html
http://www.atimes.com/atimes/China_Business/KC17Cb02.html
http://atimes.com/atimes/China_Business/KC18Cb01.html

It was written a few days before the FED announced to pull another trillion out of their butts. They have decided that it is the right move to demolish the current financial system as thoroughly and quickly as possible, for whatever reasons.

And China reacted.

Yankistan, look forward to rampant inflation and a new "we against the rest of the planet" campaign.

[mhaze]

I'm not saying it's a conspiracy, but NWO conspiracy theorists believe we will have a world currency as part of a one world (dictatorial/communist) government. So here we have China stepping up to the plate on that front.I'm curious where you get these kinds of concepts. All major nations no doubt have in the back rooms hundreds of analysts gaming strategy and tactics for medium term advantage in the current economic crisis. Some are communist nations, who exact future ambitions are not well known, at least by ordinary people.

One would wonder whether your effort to group such realities with a quickly conceived radical fringe may not just distort the fundamentals issues, but thus limit critical examination of how nations engage in an era in which economics, trade and technology are supplanting traditional cold war strategy.

[Childlike Empress]

It is an evasion strategy. People who are afraid to face the facts hide behind those they perceive to be retards, "conspiracy theorists". In face of their own utter cluelessness, they hope to get some kind of status by collectively mocking perceived "retards" who may or may not be more clueless than themselves.

Mocking retards is a no-no according to my parents, but hey what do they know?

[David Wong]

Just remember that China is prepared to let several cities die in a nuclear exchange if they came out on top. I wouldn't put it past them to be planning a way to survive a US collapse at this moment.

Well, the Chinese are genetically predisposed toward evil, science has proven it. We should not be surprised.

[mhaze]

Well, the Chinese are genetically predisposed toward evil, science has proven it. We should not be surprised.Bu shi.

[GreNME]

Just remember that China is prepared to let several cities die in a nuclear exchange if they came out on top. I wouldn't put it past them to be planning a way to survive a US collapse at this moment.

Um, both super powers in the Cold War had similar scenarios-- which were used as parodies in several comedic takes on nuclear war-- so I'm not sure what you're getting at with your example.

Also, it isn't just China who is looking for a way to survive (and undercut) the US economy crashing. Russia is also considering methods where it can get the same value it gets from US bonds without having the source be US bonds. This is all economic trash talk from two countries who want the economic strengths the US has but want them on terms that negate the need to have dependence on the US economy. From their own perspectives, it's a practical consideration. From an international perspective, it's an unrealistic suggestion (for now). If a national currency from another nation is able to develop the long-standing reliability that the US dollar has, despite its peaks and valleys, then it's going to take a lot longer than a few months or even years to develop-- it didn't happen to the US overnight, either.

[mhaze]

Um, both super powers in the Cold War had similar scenarios-- which were used as parodies in several comedic takes on nuclear war-- so I'm not sure what you're getting at with your example.

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[Gangularis]

I'm curious where you get these kinds of concepts.

You're curious where I get these concepts? Stop by the prison planet forums, sometime.

It is an evasion strategy. People who are afraid to face the facts hide behind those they perceive to be retards, "conspiracy theorists". In face of their own utter cluelessness, they hope to get some kind of status by collectively mocking perceived "retards" who may or may not be more clueless than themselves.

Mocking retards is a no-no according to my parents, but hey what do they know?

Are you suggesting I was mocking somebody? Your analysis of me is truly sparkly, but completely wrong. Maybe you'd be better at a "guess my age" game at an amusement park.

[Roboramma]

Just remember that China is prepared to let several cities die in a nuclear exchange if they came out on top. I wouldn't put it past them to be planning a way to survive a US collapse at this moment.
Do you have a source for that?

[hamelekim]

Do you have a source for that?

Not off the top of my head, no. I did a degree in International Studies in University, and I just remember that being said for some reason.

I mean, countries did war games to see what was acceptable losses.

I did a quick search and came up with this.

http://www.frontpagemag.com/articles/Read.aspx?GUID=416AD971-CDEF-41A8-ADE3-6F6756554A2C

Last year, another Chinese general told a group of journalists from Hong Kong that if the U.S. interferes with a forcible annexation of Taiwan, “we will be determined to respond.” Just to be sure his point wasn’t missed, the general added that Beijing was prepared to lose every city in central China in a nuclear exchange, but that America must be willing to sacrifice “hundreds of cities.”

I'm sure if I did more searching I would find even more quotes supporting this idea.

[David Wong]

I'm sure if I did more searching I would find even more quotes supporting this idea.

So you heard one single general saying it, and you translated that into "China" saying it.

Do you see the flaw in that reasoning?

[Travis]

Why, exactly? I see no conspiracy.

Actual conspiracies are not required for a Conspiracy Theorist to see one. In fact seeing conspiracies where no one in their right mind ever would is kinda what they excel at.

[hamelekim]

So you heard one single general saying it, and you translated that into "China" saying it.

Do you see the flaw in that reasoning?

Unlike the US, Chinese officials do not say things publicly to the world that isn't supported by the government there.

And no, I don't see any flaw in that logic given my assumption above.

Besides, it is you who is saying I am basing it off of that one statement, which is recent, when I remember this from my university days, which was last 1990's.

I'm not going to both doing a bunch more searching just to justify something to you that you will likely just brush off and ignore anyway. It's a waste of my time.

I take it as fact that China is willing to lose more cities than the US, and it's part of their nuclear deterrent.

[aviolet4u]

nuclear exchange? They are going to be a superpower with no nation? This logic is beyond me, it just looks like a sad attempt at population control.

[Foolmewunz]

nuclear exchange? They are going to be a superpower with no nation? This logic is beyond me, it just looks like a sad attempt at population control.

I'd say that you're absolutely right!

This is beyond you.

[Roboramma]

Unlike the US, Chinese officials do not say things publicly to the world that isn't supported by the government there.

And no, I don't see any flaw in that logic given my assumption above.

Besides, it is you who is saying I am basing it off of that one statement, which is recent, when I remember this from my university days, which was last 1990's.

I'm not going to both doing a bunch more searching just to justify something to you that you will likely just brush off and ignore anyway. It's a waste of my time.

I take it as fact that China is willing to lose more cities than the US, and it's part of their nuclear deterrent.

Thanks. I suppose I shouldn't be particularly surprised, though it sounds more like posturing (in the game of nuclear deterent one needs to make the other side believe that he's willing to commit, otherwise there's no longer anything to be afraid of).
Of course the best way to make the other side believe that you're commited is to actually be committed.

And it's certainly clear that the chinese national interests are put in front of individual interests much more than american national interests are put in front of individual interests.

[hamelekim]

nuclear exchange? They are going to be a superpower with no nation? This logic is beyond me, it just looks like a sad attempt at population control.

Nuclear exchange wouldn't mean complete and total annihilation, not unless the US launched all 9000 nukes, and then they would be dooming the world.

it's more likely they would hit the major military and industrial cities and areas of the country. The others would survive, and if they planned well, they could keep control of those areas with the nuclear fallout and all of that.

I just don't know how the US population would react, and how the government could keep control.

China has had thousands of years of control over its people. If any country could do it, they could.

[aviolet4u]

Well its easy to play that game like- "oh a few cities here and a few cities there...oops there go 200 million people."

Lets hope no matter how bad things get it never comes to that. I don't know how many prophecies I read saying that a nuke is going to hit in June/late 2009.

[mikehh]

Well its easy to play that game like- "oh a few cities here and a few cities there...oops there go 200 million people."

Lets hope no matter how bad things get it never comes to that. I don't know how many prophecies I read saying that a nuke is going to hit in June/late 2009.

^^^ every three months something like this pops up.

some guy in salt lake was yelling so loud around christmas 08 that we wouldnt make new years due to nukes he landed on drudge.