China calls for new global currency

[Dr. A ♥ O 203]

<h1></h1>

China calls for new global currencyBy JOE McDONALD, AP Business Writer Joe Mcdonald, Ap Business Writer – 4 mins ago

BEIJING – China is calling for a new global currency to replace the dominant dollar, showing a growing assertiveness on revamping the world economy ahead of next week's London summit on the financial crisis.

The surprise proposal by Beijing's central bank governor reflects unease about its vast holdings of U.S. government bonds and adds to Chinese pressure to overhaul a global financial system dominated by the dollar and Western governments.

The world economic crisis shows the "inherent vulnerabilities and systemic risks in the existing international monetary system," Gov. Zhou Xiaochuan said in an essay released Monday by the bank. He recommended creating a currency made up a basket of global currencies and controlled by the International Monetary Fund and said it would help "to achieve the objective of safeguarding global economic and financial stability."

Zhou did not mention the dollar by name. But in an unusual step, the essay was published in both Chinese and English, making clear it was meant for a foreign audience.

China has long been uneasy about relying on the dollar for the bulk of its trade and to store foreign reserves. Premier Wen Jiabao publicly appealed to Washington this month to avoid any response to the crisis that might weaken the dollar and the value of Beijing's estimated $1 trillion in Treasuries and other U.S. government debt.

For decades, the dollar has been the world's most widely used currency. Many governments hold a large portion of their reserves in dollars. Crude oil and many commodities are priced in dollars. Business deals around the world are done in dollars.

But the financial crisis has highlighted how America's economic problems — and by extension the dollar — can wreak havoc on nations around the world. China is in a bind. To keep the value of its currency steady — some say undervalued — the Chinese government has to recycle its huge trade surpluses, and the biggest, most liquid option for investing them is U.S. government debt.

To better insulate countries from the ills of one country or one currency, Zhou said the IMF should create a "reserve currency" based on shares in the body held by its 185 member nations, known as special drawing rights, or SDRs.

He said it also should be used for trade, pricing commodities and accounting, not just government finance.

Zhou also called for changing how SDRs are valued. Currently, they are based on the value of four currencies — the dollar, euro, yen and British pound. "The basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies," he wrote.

Beijing has been unusually bold in recent months in expressing concern about Washington's financial management and pushing for global economic changes. That reflects both its relative financial health and growing concern that increased globalization means missteps abroad could harm its own economy.

Zhou's comments are also part of China's longstanding push to reform the IMF, World Bank and global financial system to give greater voice to China and other developing economies — another theme that will be heard at the G-20 summit from China, Brazil, Russia and India.

"Overdue reforms should give proper representation to and increase the say of the emerging and developing economies," Yi Xianrong, a researcher with the Institute of Economics and Finances at the Chinese Academy of Social Sciences, a government think-tank, wrote in the government newspaper China Daily.

"Proper representation and a bigger voice for the developing countries are the need of the hour. For instance, being the world's third-largest economy and the largest foreign reserves holder, China should get its due place in the monetary body."

Another idea Yi raised was that the U.S. and Europe should give up their traditional privileges of appointing the heads of the World Bank and the IMF.

The idea of a creating a new global reserve currency isn't new. But analysts say the proposal isn't likely to gain much traction because it faces major obstacles. It would require acceptance from nations that have long used the dollar and hold huge stockpiles of the U.S. currency.

"There has been for decades talk about creating an international reserve currency and it has never really progressed," said Michael Pettis, a finance professor at Peking University's Guanghua School of Management.

Managing such a currency would require balancing the contradictory needs of countries with high and low growth or with trade surpluses or deficits, Pettis said. He said the 16 European nations that use the euro have faced "huge difficulties" in managing monetary policy even though their economies are similar.

"It's hard for me to imagine how it's going to be easier for the world to have a common currency for trade," he said.

Source: link

[milimelo 4,481]

Didn't Russia already call for new global currency last week or so? Could've been a joint effort...

[Dr. A ♥ O 203]

I didn't see that article yet if so. Before I have to go run errands I wanted to put in my two cents. I feel that this is an opportunity for a peaceful transition of power between the United States and China. In my political science classes it was estimated that China would become the new hegemony within the next 50 years. That can be a violent transition or a peaceful one. I opt for peaceful.

Edited March 24, 2009 by Far2Long

[milimelo 4,481]

China calls for new global currency

By JOE McDONALD – 3 hours ago

BEIJING (AP) — China is calling for a new global currency controlled by the International Monetary Fund, stepping up pressure ahead of a London summit of global leaders for changes to a financial system dominated by the U.S. dollar and Western governments.

The comments, in an essay by the Chinese central bank governor released late Monday, reflect Beijing's growing assertiveness in economic affairs. China is expected to press for developing countries to have a bigger say in finance when leaders of the Group of 20 major economies meet April 2 in London to discuss the global crisis.

Gov. Zhou Xiaochuan's essay did not mention the dollar by name but said the crisis showed the dangers of relying on one nation's currency for international payments. In an unusual step, the essay was published in both Chinese and English, making clear it was meant for an international audience.

"The crisis called again for creative reform of the existing international monetary system towards an international reserve currency," Zhou wrote.

A reserve currency is the unit in which a government holds its reserves. But Zhou said the proposed new currency also should be used for trade, investment, pricing commodities and corporate bookkeeping.

Beijing has long been uneasy about relying on the dollar for the bulk of its trade and to store foreign reserves. Premier Wen Jiabao publicly appealed to Washington this month to avoid any steps in response to the crisis that might erode the value of the dollar and Beijing's estimated $1 trillion holdings in Treasuries and other U.S. government debt.

The currency should be based on shares in the IMF held by its 185 member nations, known as special drawing rights, or SDRs, the essay said. The Washington-based IMF advises governments on economic policy and lends money to help with balance-of-payments problems.

Some economists have suggested creating a new reserve currency to reduce reliance on the dollar but acknowledge it would face major obstacles. It would require acceptance from nations that have long used the dollar and hold huge stockpiles of the U.S. currency.

"There has been for decades talk about creating an international reserve currency and it has never really progressed," said Michael Pettis, a finance professor at Peking University's Guanghua School of Management.

Managing such a currency would require balancing the contradictory needs of countries with high and low growth or with trade surpluses or deficits, Pettis said. He said the 16 European nations that use the euro have faced "huge difficulties" in managing monetary policy even though their economies are similar.

"It's hard for me to imagine how it's going to be easier for the world to have a common currency for trade," he said.

China has pressed for changes to give developing countries more influence in the IMF, the World Bank and other finance bodies. G20 finance officials issued a statement at their last meeting calling for such changes but gave no details of how that might happen.

Russia also has called for such reforms and says it will press its case at the London summit.Zhou said the new currency would let governments manage their economies more efficiently because its value would not be influenced by any one nation's need to regulate its own finance and trade.

"A super-sovereign reserve currency managed by a global institution could be used to both create and control global liquidity," Zhou wrote. "This will significantly reduce the risks of a future crisis and enhance crisis management capability."

Zhou also called for changing how SDRs are valued. Currently, they are based on the value of four currencies — the dollar, euro, yen and British pound.

"The basket of currencies forming the basis for SDR valuation should be expanded to include currencies of all major economies," Zhou wrote. "The allocation of the SDR can be shifted from a purely calculation-based system to one backed by real assets, such as a reserve pool, to further boost market confidence in its value."

This is all starting to sound like the story from the "Left Behind" books (tv series?)

[Dr. A ♥ O 203]

Same writer and nearly the same article minus somethings. Interesting. Where did you pluck your source from?

Also what is the "Left Behind" series?

[fozzie 41]

didn't we have this thread yesterday?

[milimelo 4,481]

Same writer and nearly the same article minus somethings. Interesting. Where did you pluck your source from?

Also what is the "Left Behind" series?

google/AP http://www.google.com/hostednews/ap/articl...Tg2W3AD974D8384

Left Behind

Amazon.com Review

Piloting his 747, Rayford Steele is musing about his wife Irene's irritating religiosity and contemplating the charms of his "drop-dead gorgeous" flight attendant, Hattie. First Irene was into Amway, then Tupperware, and now it's the Rapture of the Saints--the scary last story in the Bible in which Christians are swept to heaven and unbelievers are left behind to endure the Antichrist's Tribulation. Steele believes he'll put the plane on autopilot and go visit Hattie. But Hattie's in a panic: some of the passengers have disappeared! The Rapture has happened, abruptly driverless cars are crashing all over, and the slick, sinister Romanian Nicolae Carpathia plans to use the UN to establish one world government and religion. Resembling "a young Robert Redford" and silver-tongued in nine languages, Carpathia is named People's "Sexiest Man Alive." (This reviewer, a former People writer, finds this plot twist plausible.) Meanwhile, Steele teams up with Buck Williams, a buck-the-system newshound, to form the Tribulation Force, an underground of left-behind penitents battling the Antichrist.

Ex-presidential candidate Pat Robertson briefly outsold Michael Crichton with his apocalypse novel The End of the Age (now available on audiocassette), and the similar The Third Millennium sells well, but the Left Behind series is the absolute champion in the race to make the Book of Revelation into racy thriller reading. --Tim Appelo

From Library Journal

On a flight from Chicago to London, several passengers aboard Capt. Rayford Steele's plane suddenly and mysteriously disappear. When Steele radios to London to report the situation, he discovers that the incident on his plane is not an isolated phenomenon but a worldwide occurrence. As Steele begins his search for answers, he learns that the Christ has come to take the faithful with Him in preparation for the coming apocalyptic battle between good and evil and that those who have been left behind must face seven dark and chaotic years in which they must decide to join the forces of Christ or the forces of Anti-Christ. Jenkins, writer-in-residence at Moody Press, and LaHaye (A Nation Without a Conscience, Tyndale, 1994) have written a gripping thriller that captures the anxiety and fear that interpretations of Revelation often inspire. For most libraries.

Copyright 1996 Reed Business Information, Inc.

[Dr. A ♥ O 203]

didn't we have this thread yesterday?

Maybe so I dunno. Milimelo was just saying Russia just called for the same thing the other day.

Same writer and nearly the same article minus somethings. Interesting. Where did you pluck your source from?

Also what is the "Left Behind" series?

google/AP http://www.google.com/hostednews/ap/articl...Tg2W3AD974D8384

Left Behind

Amazon.com Review

Piloting his 747, Rayford Steele is musing about his wife Irene's irritating religiosity and contemplating the charms of his "drop-dead gorgeous" flight attendant, Hattie. First Irene was into Amway, then Tupperware, and now it's the Rapture of the Saints--the scary last story in the Bible in which Christians are swept to heaven and unbelievers are left behind to endure the Antichrist's Tribulation. Steele believes he'll put the plane on autopilot and go visit Hattie. But Hattie's in a panic: some of the passengers have disappeared! The Rapture has happened, abruptly driverless cars are crashing all over, and the slick, sinister Romanian Nicolae Carpathia plans to use the UN to establish one world government and religion. Resembling "a young Robert Redford" and silver-tongued in nine languages, Carpathia is named People's "Sexiest Man Alive." (This reviewer, a former People writer, finds this plot twist plausible.) Meanwhile, Steele teams up with Buck Williams, a buck-the-system newshound, to form the Tribulation Force, an underground of left-behind penitents battling the Antichrist.

Ex-presidential candidate Pat Robertson briefly outsold Michael Crichton with his apocalypse novel The End of the Age (now available on audiocassette), and the similar The Third Millennium sells well, but the Left Behind series is the absolute champion in the race to make the Book of Revelation into racy thriller reading. --Tim Appelo

From Library Journal

On a flight from Chicago to London, several passengers aboard Capt. Rayford Steele's plane suddenly and mysteriously disappear. When Steele radios to London to report the situation, he discovers that the incident on his plane is not an isolated phenomenon but a worldwide occurrence. As Steele begins his search for answers, he learns that the Christ has come to take the faithful with Him in preparation for the coming apocalyptic battle between good and evil and that those who have been left behind must face seven dark and chaotic years in which they must decide to join the forces of Christ or the forces of Anti-Christ. Jenkins, writer-in-residence at Moody Press, and LaHaye (A Nation Without a Conscience, Tyndale, 1994) have written a gripping thriller that captures the anxiety and fear that interpretations of Revelation often inspire. For most libraries.

Copyright 1996 Reed Business Information, Inc.

So it's a series based on the second coming?