China calls for supercurrency

[murtagh]

Anyone else noticed this / have thoughts?

from: http://www.bloomberg.com/apps/news?pid=20601087&sid=ae6ezzIMK6cs&refer=home

Central bank Governor Zhou Xiaochuan this week urged the International Monetary Fund to create a “super-sovereign reserve currency.” The dollar weakened after the Federal Reserve said it would buy Treasuries and the U.S. government outlined plans to buy illiquid bank assets

The global crisis raised the question of which reserve currency would secure “global financial stability and facilitate world economic growth,” Zhou said. He proposed expanding the use of the IMF’s Special Drawing Rights, which are currency units valued against a composite of currencies.

“The basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies, and gross domestic product may also be included as a weighting,” said Zhou.

Some questions from me to kick us off ..

Is this more posturing than a real suggestion?

What does China's continued digs at the US position mean for the global economy in the short and medium term?

 

[murtagh]

Oh, and I thought that Peter Schiff's latest ties into this nicely.

from: http://www.europac.net/externalframeset.asp?from=home&id=15761&type=schiff

Just last week, Chinese premier Wen Jiabao voiced concern about his country’s massive investments in U.S. government debt. In the most unequivocal statement yet by the Chinese leadership on this issue, Wen made it plain that he was concerned with depreciation, not default. With his fears now officially confirmed by the Fed statement, we must wonder when the Chinese will finally change course.

Is this China's start of a course correction?

 

[Aaron Sice]

i told EVERYONE that a global currency is on the cards - but i'm just a crackpot conspiracy theorist.

this is a direct call from one of the largest holders of USD debt, in USD, outside the USA.

it's coming folks. may take 10, 15 or 20 years, but it's coming.

 

[murtagh]

i told EVERYONE that a global currency is on the cards - but i'm just a crackpot conspiracy theorist.

this is a direct call from one of the largest holders of USD debt, in USD, outside the USA.

it's coming folks. may take 10, 15 or 20 years, but it's coming.

I hoped you'd see this thread .. I remember you referring to "The Amero", if that's right?

Did you come up with the idea this was coming from researching on the web? I would be interested in any links you have. Either proponents or detractors - it's such a new idea to me that I don't know how to think through the consequences.

The USD would fall in relative value as people moved from it? Would this cause inflation inside the US, as people sold USD?

 

[Aaron Sice]

start with the Euro. that was a conspiracy theory in the early nineties. would never happen, the germans will never let go of the mark, the GBP will never be dissolved, the italians will never let go of one of the oldest currencies in existence - blablahblah.

the Security and Prosperity Partnership of North America is already signed without congress consultation or a referendum - it basically makes the American, Canadian and Mexican constitutions toilet paper. Look up NAFTA or North American Union.

in 1997 a similar thing was passed called Partnership for Prosperity and Security in the Caribbean. not a bubble was blown over that one either.

Rudd called for a regional currency by 2020 - that thread is on here.

Euro + Amero + Asiano (lol)....makes the three pillars amalgamating dozens upon dozens of currencies. The Peso is likely to be the currency for any South American Union, and Africa is a write off along with the Middle East.

i'll be none of you even Knew that George Soros was in Bunbury, WA, October 2007. Funny what happened to the Aussie Economy and resources after that.

 

[Chatto]

I recall reading 'Target Iran' which stated that a massive point of contention between Iran and the US was over the Iranians wanting to change the petro-dollar to the petro-euro, which would devalue the US dollar as the key currency of oil.
It seems the Chinese are in a position now where they can point critisism at US capitalist excess and call for a currency platform based on many economies. Or maybe they're just saying you've had your day in the sun yanks!

 

[Chatto]

What happened to the Canadians? Shouldn't it be the Camero?

 

[Aaron Sice]

absolutely correct - the Iranians want to trade oil in Euro and the yanks don't like it. it would devalue the USD immensely as it would reduce the amount of it traded.

Maybe it's a snide remark by the Chinese to make sure they "sort it out"....! Maybe the Iraninas are closer to trading oil in Euros than we think. If they are, and China is holding all that lovely USD denominated debt and dollars....

They're stockpiling oil in tankers as we speak. there's a rumour floating that if they are cornered into continuing to trade in USD, then they'll flood the market with cheap oil and bankrupt the UAE.

 

[Aaron Sice]

What happened to the Canadians? Shouldn't it be the Camero?

canadians are part of NAFTA and the proposed NAU.

 

[steveadl]

absolutely correct - the Iranians want to trade oil in Euro and the yanks don't like it. it would devalue the USD immensely as it would reduce the amount of it traded.

Were'nt Iraq threatening to do this before the war as well? Or am I confusing them with Iran?

 

[Mindmaster]

"Zhou’s comments may also signal ambitions for the yuan to play a bigger global role. The central bank this week signed a currency swap with Indonesia, adding to agreements since December with South Korea, Hong Kong, Malaysia and Belarus. It’s also preparing for trade settlement in the Chinese currency with Hong Kong, Macau and the Association of Southeast Asian Nations.

“There is concern and even frustration among top policymakers in Beijing about China’s high exposure to U.S. dollar-denominated financial assets,” said Brian Jackson, senior strategist at Royal Bank of Canada in Hong Kong. "

I'd be concerned if the US was up to its neck in debt to me and my foreign reserves included so much US dollars. Having my own currency pegged to the US dollar just makes things worse.

Hard for the Yuan to dominate when its tied to the US dollar that is in danger of nose diving.

Oh and I want my youtube access back

 

[nonrecourse]

What happened to the Canadians? Shouldn't it be the Camero?

The canadians have the looney

http://en.wikipedia.org/wiki/Loonie

 

[chilliaa]

"Zhou’s comments may also signal ambitions for the yuan to play a bigger global role. The central bank this week signed a currency swap with Indonesia, adding to agreements since December with South Korea, Hong Kong, Malaysia and Belarus. It’s also preparing for trade settlement in the Chinese currency with Hong Kong, Macau and the Association of Southeast Asian Nations.

“There is concern and even frustration among top policymakers in Beijing about China’s high exposure to U.S. dollar-denominated financial assets,” said Brian Jackson, senior strategist at Royal Bank of Canada in Hong Kong. "

I'd be concerned if the US was up to its neck in debt to me and my foreign reserves included so much US dollars. Having my own currency pegged to the US dollar just makes things worse.

Hard for the Yuan to dominate when its tied to the US dollar that is in danger of nose diving.

Oh and I want my youtube access back

This is so funny, you dont get one without the other. The chinese are concerned because they own alot of US debt, well dah.... who financed US consumers to buy goods made in China.

 

[Ajax]

Reminds me of Reserve Bank of Australia museum web-site I was reading a few days ago.
where we almost had the Australian Royal instead of the Australian dollar (even concept notes had been printed)

http://www.rba.gov.au/Museum/Displa...rm_of_the_currency/the_royal_controversy.html

"THE RESERVE BANK AND REFORM OF THE CURRENCY: 1960–1988
The Royal Controversy
A big decision concerned the name of the new currency unit.

Views varied widely from traditional labels such as 'pound' and 'dollar' to more distinctively Australian names such as 'Austral'.

A public naming competition seeking suggestions 'with an Australian flavour' added nearly 1 000 names to this list including such exotic suggestions as 'Oz', 'Boomer', 'Roo', 'Kanga', 'Emu', 'Koala', 'Digger', 'Zac', 'Kwid', 'Dinkum' and 'Ming' (the nickname of Prime Minister Menzies).

In June 1963, with no clear consensus having emerged on a name, the Government decided to name the new currency the 'Royal'. Treasurer Harold Holt explained that the Government saw this name as 'emphasising our link with the Crown' and as being 'a dignified word with a pleasing sound.'

 

[kathryn d]

The canadians have the looney

http://en.wikipedia.org/wiki/Loonie

and the tooney, quarter, dime, nickel, and penny.

 

[ColonialBoy]

i told EVERYONE that a global currency is on the cards - but i'm just a crackpot conspiracy theorist.

There is a global currency, has been for thousands of years - precious metals, in particular gold. The huge expansion in global money supply over the past 35 years (since the Smithsonian Agreement http://en.wikipedia.org/wiki/Smithsonian_Agreement ) has been brought about using fiat currencies with no hard asset backing. Central banks print money at will.

 

[Aaron Sice]

what's your point?

is this another fiat-currency-will-kill-you-like-smoking campaign?

 

[Learnings]

Ive presumed they're going to use this "crisis" to crash the USD and bring in the Amero to bring 'stability'

 

[AUSPROP...]

opinion seems to be that the USD will survive as the reserve currency. It sure would be a dark day when merging the USD with the Peso would be seen as stabilisation! it would be too late anyway by that stage

 

[Aaron Sice]

opinion seems to be that the USD will survive as the reserve currency. It sure would be a dark day when merging the USD with the Peso would be seen as stabilisation! it would be too late anyway by that stage

more likely the other way - the Peso and CD will be dropped for the Amero, and US just "might as well" follow suit a decade or so later.