China calls for new reserve currency

A trillion here, a trillion there....pretty soon it starts to add up. And our creditors have noticed. The US dollar is the world's reserve currency. This allows the US to borrow money heavily since other nations want to hold their reserves in our cash. Well, China has started to worry about the value of our dollar. Perhaps monetizing the debt isn't such a good thing....

China is calling for an independent reserve currency. One not tied to a single country........hmmm, that would be us... Bet this won't make CNN. Or the New York Times.

China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.

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.

I think I'll look into that "gold" thing...........