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Deckard

China Reiterates Call For New World Reserve Currency

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Surprised this escaped the attention of NWO proponents on HPC ;)

http://www.bloomberg.com/apps/news?pid=206...id=av2lPCU6D0E0

June 26 (Bloomberg) -- China’s central bank renewed its call for a global currency and said the International Monetary Fund should manage part of its members’ foreign-exchange reserves, triggering a decline in the U.S. dollar.

“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,†the People’s Bank of China said in a review of the economy in 2008 released today.

People’s Bank Governor Zhou Xiaochuan in March urged the IMF to expand the functions of its unit of account and move toward a “super-sovereign reserve currency.†Russian President Dmitry Medvedev proposed on June 5 that nations use a mix of regional reserve currencies to reduce reliance on the dollar.

“Zhou Xiaochuan sees the current international financial system is flawed, putting too much emphasis on the dollar as a reserve currency,†said Kevin Lai, an economist with Daiwa Institute of Research in Hong Kong. “The dollar should depreciate to address the global imbalance but because it’s a reserve currency it cannot.â€

The dollar declined to $1.4081 per euro as of 11:05 a.m. in London, from $1.3988 yesterday in New York, extending its loss this week to 1.1 percent. The yen weakened to 134.86 per euro, from 134.22. The U.S. currency fell to 95.78 yen, from 95.95 yen.

Group of 20

Group of 20 leaders on April 2 gave approval for the IMF to raise $250 billion by issuing Special Drawing Rights, or SDRs, the artificial currency that the agency uses to settle accounts among its member nations. It also agreed to put another $500 billion into the IMF’s war chest.

“Special drawing rights of the IMF should be given full play, and the international body should manage part of its members’ reserves,†the central bank report said.

SDRs were created by the IMF in 1969 to support the Bretton Woods exchange-rate system that collapsed in 1971. They act as a unit of account rather than a currency. The cash is disbursed in proportion to the money each member nation pays into the fund.

“There may be signs here of tensions mounting between the PBOC’s economic concerns over China’s holdings of dollars and the Chinese government’s diplomatic reasons for doing so,†Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London, wrote in an e-mail.

My take: SDRs? Not. One. Chance.

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