newbonic Posted March 30, 2011 Share Posted March 30, 2011 China economist blasts dollar dominance on eve of G20 (Reuters) - Dollar dominance is sowing the seeds of financial turmoil, and the solution is to promote new reserve currencies, a Chinese government economist said in a paper published on the eve of a G20 meeting about how to reform the global monetary system. Although not an official policy statement, the paper by Xu Hongcai, a department deputy director at the China Center for International Economic Exchanges, offered a window onto the domestic pressures bearing on Beijing to move away from a dollar-centric global economy. The China Center, a top government think tank, has represented the Chinese government in organizing a forum on Thursday in Nanjing that will bring together finance ministers, central bankers and academics from the Group of 20 wealthy and developing economies. Xu's paper, "Reform of the international monetary system under the G20 framework," was published in Chinese on the center's website this week (www.cciee.org.cn). "Nations around the world have no way of restricting dollar issuance by the Federal Reserve. The current international monetary system lacks both stability and fairness," Xu wrote. He said the global monetary system had fallen into a "dollar trap." While it would be sensible to reduce dollar holdings in official currency reserves, nations cannot easily cut back, because doing so would only lead the dollar to weaken and so hit the value of their assets, he said. CHINA'S DILEMMA China's dollar dilemma is particularly acute, though Xu did not say as much. China had $2.85 trillion in foreign exchange reserves at the end of last year, more than any other country. About two-thirds are estimated to be invested in dollars. Printy printy is starting to unravel... Quote Link to comment Share on other sites More sharing options...
Fishfinger Posted March 30, 2011 Share Posted March 30, 2011 ...and hence the reason they are buying lots of useless (and not so useless) lumps of metal.... The future's bright, the future is yellow and white. Quote Link to comment Share on other sites More sharing options...
Ruffneck Posted March 30, 2011 Share Posted March 30, 2011 Newsflash.... Money created out of thin air not backed by anything is worthless. Thankyou Mr enlightened Chinese man. Quote Link to comment Share on other sites More sharing options...
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