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China Wants IMF to Dump Dollar as World CurrencyChina wants the International Monetary Fund to set up a new system that is not dependent on the US Dollar as a Reserve Currency. China fears that the inflationary spending of the Obama Adm. Will devalue Treasury Bonds held in World Central Banks, causing a world monetary collapse. After WWII international banks started investing in dollar denominated US Treasury Bonds, because the dollar was the strongest world currency. This created the saying that the “US is the richest nation on earth”. But the US overspending reliance on world banks to buy Treasury Bonds has turned the US into the world’s largest debtor nation and hence the poorest nation on earth, making Treasury bonds a bad investment. When questioned about their opinion of a new world currency by Congress today, Fed. Chairman Bernanke and Treasury Sec. Geithner said they were absolutely against it. The reason of course is that a new currency instead of the dollar would be used in international trade transactions, relieving other nations from holding worthless US dollars. This Chinese proposal would put a stop to out of control US spending. China said John Maynard Keynes made a similar suggestion in the 1940’s. Too bad the US didn’t take this Keynesian advice then. Looks like Obama has accidentally created real change, although unintended and opposed by his administrations. Update, when Obama was asked about China’s proposal at the Press Conference, he skirted the question and didn’t answer it. The Shadow's blog | login to post comments |