China wants a new currency standard.
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J.C.
Sep 23, 2008, 1:45:07 AM9/23/08
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One not dependent on the U.S. currency.
http://www.reuters.com/article/ousiv/idUSPEK4365020080917?sp=true
http://www.reuters.com/article/ousiv/idUSPEK4365020080917?sp=true
CincyBabe
Sep 23, 2008, 8:49:17 AM9/23/08
to World-thread
Can't say I blame them, especially with the way the US seems to be
going at the moment, and with all the debt we've incurred with that
country. They know better than anyone else what a sad state we're in.
Why can I not get Reuters pages?
going at the moment, and with all the debt we've incurred with that
country. They know better than anyone else what a sad state we're in.
Why can I not get Reuters pages?
Justice
Sep 23, 2008, 9:39:02 AM9/23/08
to World-thread
The headline is a bit of a misnomer. "China" isn't considering it,
this is an article about an article that was written by a University
Professor.
For now, it's the same kind of speculation that you see in our
newspapers all the time, when someone "in the field" looks out of the
box and says, "whoa, we could hang with these people." Is that what
the government wants?
The Professor, prolly like us, wants to make sure that everyone is
considering all the options.
> >http://www.reuters.com/article/ousiv/idUSPEK4365020080917?sp=true- Hide quoted text -
>
> - Show quoted text -
this is an article about an article that was written by a University
Professor.
For now, it's the same kind of speculation that you see in our
newspapers all the time, when someone "in the field" looks out of the
box and says, "whoa, we could hang with these people." Is that what
the government wants?
The Professor, prolly like us, wants to make sure that everyone is
considering all the options.
>
> - Show quoted text -
xieu...@gmail.com
Sep 23, 2008, 10:29:44 AM9/23/08
to World-thread
Here is the whole article from Reuters..
My comment:
Peoples daily is not widespread, not so much as China daily or local
newspapers. But, Peoples daily allows to learn what China will do in
the future (one year, five years or beyond). When those articles
appear under signature (like in this case), it is rather a wish, an
offer to the rest of the world, a topic to be discussed with other
parties involved in order to reach agreements. Therefore is not a
final decission.
Is not a secret that most countries want a new international monetary
system. Rather, we need a new monetary system since a few years ago.
Not just because the the weakness of the US dollar, but because it
does not reflects the true structure of trade. Nowadays the US dollar
is not a helpful tool for trade, to be more accurate not helpful
enough, even if the US dollar would be strong.
Today, in fact, we do not have one actual tool, we have many. For
example, the new US dollar defined in 1973 supposed that Saudi Arabia
would control oil production, and if the US dollar is the standard
tool to denominate Saudi oil, all oil would follow what US dollar
dictates. Today, Saudi Arabia hardly represents 30% of international
oil trade, the Orinoco belt in Venezuela when refineries will be
finished, will produce more oil than Saudi Arabia (obviously it will
not be denominated in US dollars), oil produced in the norht atlantic
ocean is as huge as Saudi oil, etc. Also, other commodities that in
1973 were under US dollar control (metals, precious metalls, food,
etc.) and therefore denominated in US dollars nowadays are not any
longer. Also, some giants of commodities such as Russia, Brasil and
others were not integrated in the global trade in 1973. Also,
bilateral trade at special prices (above or below the standard value
in markets) sizes more than trade in standard markets. There are many
reasons to change such monetary system and the US dollar as the
standard tool, even if the US dollar would be strong, but more reasons
now when the US dollar is weak.
That is the real problem in particular when volatility in markets does
not allow to convert easily from one to any other. Trade is not
invented for speculation, it is invented to develop the real economies
and the standard tool must serve the real economies not to speculators
who take advantage of volatility. Industries want to know that the
price that they state in their budgets and their business plans will
not change dramatically making those budgets and those business plans
useless, creating fake profits or fake losses just because one
particular currency in one remote country rose or fell. The real
economy wants to make profit trhough their work and their
competitiveness, not through currency market speculation.
Conclusion, the US dollar does not play the role of an standard tool
since years ago (although it is still the most important one among
them), and that fact harms global trade.
An standard tool must meet some requirements.
1. It must be accesed wordwide. Right now the easiest currency is the
Euro, not the US dollar. Anyway, why to limit such standard tool to a
single currency?
2. It must me stable versus most goods. I mean, the price of any good
should not change because one particular commodity rises or falls. The
real economy wants stable prices. If we use a basket of currencies
that includes the most used ones, or even those which governments
commit to a fixed exchange rate reviewable every two quarters, it will
make trade easier.
3. It must be globally acceptable. If we include 80% of the population
of the world, and 80% of global trade with such currencies it will
mean that most people and most transactions can use their local
currency for international transactions. Obviously they will accept it
since time 0.
4. Its value should not be for forced by one agent in particular. If
one country forces the value of that standard tool (and therefore the
value of all goods and services around the world) it creates tension
in trade and in markets that finally harm all players, as we can see
nowadays.
I am absolutely convinced that this new standard tool will appear in
within some years. Probably what this article in Peoples daily means
is that China thinks that it is the right time to start talks about
such tool, in particular, days before the G7 summit and when US
authorities are (or should be) planing a long term recovery plan for
their economy as this new standard tool would serve them as much as
the rest of the world.
China paper urges new currency order after "financial tsunami"
BEIJING (Reuters) - Threatened by a "financial tsunami," the world
must consider building a financial order no longer dependent on the
United States, a leading Chinese state newspaper said on Wednesday.
The commentary in the overseas edition of the People's Daily said the
collapse of Lehman Brothers Holdings Inc (LEH.P: Quote, Profile,
Research, Stock Buzz) "may augur an even larger impending global
'financial tsunami'."
The People's Daily is the official newspaper of China's ruling
Communist Party, and the overseas edition is a smaller circulation
offshoot of the main paper.
Its pronouncements do not necessarily directly reflect leadership
views, but this commentary by a professor at Shanghai's Tongji
University suggested considerable official alarm at the strains
buckling world financial markets.
China's central bank earlier this week cut its lending rate for the
first time in six years, a move analysts said was aimed at bolstering
the economy and the battered stock market.
"The eruption of the U.S. sub-prime crisis has exposed massive
loopholes in the United States' financial oversight and supervision,"
writes the commentator, Shi Jianxun.
"The world urgently needs to create a diversified currency and
financial system and fair and just financial order that is not
dependent on the United States."
But Vice Premier Wang Qishan, on a visit to the United States, told
U.S. trade officials in a meeting on Tuesday that China and the United
States needed to maintain close economic ties with global markets
going through such turbulence.
"The Chinese government is well aware of the fact that the United
States, which is the world's largest developed country, and China,
which is the world's largest developing country, should have
constructive and cooperative economic and trade relations," he said.
China is a major buyer of U.S. Treasury bonds, and through its
sovereign wealth fund it has taken stakes in two large U.S. financial
institutions.
In July 2005, China revalued the yuan and freed it from a dollar peg
to float within managed bands. But the yuan and China's trade remains
tightly linked to the fortunes of the dollar.
The commentary suggested China must brace for grave economic fallout
and look to alternatives, saying the crisis brings to mind the Great
Depression of the 1930s.
"Lehman Brothers announced bankruptcy will not only have a domino
effect on the global financial world, it will bring a shock to the
world economy," the front-page comment stated.
My comment:
Peoples daily is not widespread, not so much as China daily or local
newspapers. But, Peoples daily allows to learn what China will do in
the future (one year, five years or beyond). When those articles
appear under signature (like in this case), it is rather a wish, an
offer to the rest of the world, a topic to be discussed with other
parties involved in order to reach agreements. Therefore is not a
final decission.
Is not a secret that most countries want a new international monetary
system. Rather, we need a new monetary system since a few years ago.
Not just because the the weakness of the US dollar, but because it
does not reflects the true structure of trade. Nowadays the US dollar
is not a helpful tool for trade, to be more accurate not helpful
enough, even if the US dollar would be strong.
Today, in fact, we do not have one actual tool, we have many. For
example, the new US dollar defined in 1973 supposed that Saudi Arabia
would control oil production, and if the US dollar is the standard
tool to denominate Saudi oil, all oil would follow what US dollar
dictates. Today, Saudi Arabia hardly represents 30% of international
oil trade, the Orinoco belt in Venezuela when refineries will be
finished, will produce more oil than Saudi Arabia (obviously it will
not be denominated in US dollars), oil produced in the norht atlantic
ocean is as huge as Saudi oil, etc. Also, other commodities that in
1973 were under US dollar control (metals, precious metalls, food,
etc.) and therefore denominated in US dollars nowadays are not any
longer. Also, some giants of commodities such as Russia, Brasil and
others were not integrated in the global trade in 1973. Also,
bilateral trade at special prices (above or below the standard value
in markets) sizes more than trade in standard markets. There are many
reasons to change such monetary system and the US dollar as the
standard tool, even if the US dollar would be strong, but more reasons
now when the US dollar is weak.
That is the real problem in particular when volatility in markets does
not allow to convert easily from one to any other. Trade is not
invented for speculation, it is invented to develop the real economies
and the standard tool must serve the real economies not to speculators
who take advantage of volatility. Industries want to know that the
price that they state in their budgets and their business plans will
not change dramatically making those budgets and those business plans
useless, creating fake profits or fake losses just because one
particular currency in one remote country rose or fell. The real
economy wants to make profit trhough their work and their
competitiveness, not through currency market speculation.
Conclusion, the US dollar does not play the role of an standard tool
since years ago (although it is still the most important one among
them), and that fact harms global trade.
An standard tool must meet some requirements.
1. It must be accesed wordwide. Right now the easiest currency is the
Euro, not the US dollar. Anyway, why to limit such standard tool to a
single currency?
2. It must me stable versus most goods. I mean, the price of any good
should not change because one particular commodity rises or falls. The
real economy wants stable prices. If we use a basket of currencies
that includes the most used ones, or even those which governments
commit to a fixed exchange rate reviewable every two quarters, it will
make trade easier.
3. It must be globally acceptable. If we include 80% of the population
of the world, and 80% of global trade with such currencies it will
mean that most people and most transactions can use their local
currency for international transactions. Obviously they will accept it
since time 0.
4. Its value should not be for forced by one agent in particular. If
one country forces the value of that standard tool (and therefore the
value of all goods and services around the world) it creates tension
in trade and in markets that finally harm all players, as we can see
nowadays.
I am absolutely convinced that this new standard tool will appear in
within some years. Probably what this article in Peoples daily means
is that China thinks that it is the right time to start talks about
such tool, in particular, days before the G7 summit and when US
authorities are (or should be) planing a long term recovery plan for
their economy as this new standard tool would serve them as much as
the rest of the world.
China paper urges new currency order after "financial tsunami"
BEIJING (Reuters) - Threatened by a "financial tsunami," the world
must consider building a financial order no longer dependent on the
United States, a leading Chinese state newspaper said on Wednesday.
The commentary in the overseas edition of the People's Daily said the
collapse of Lehman Brothers Holdings Inc (LEH.P: Quote, Profile,
Research, Stock Buzz) "may augur an even larger impending global
'financial tsunami'."
The People's Daily is the official newspaper of China's ruling
Communist Party, and the overseas edition is a smaller circulation
offshoot of the main paper.
Its pronouncements do not necessarily directly reflect leadership
views, but this commentary by a professor at Shanghai's Tongji
University suggested considerable official alarm at the strains
buckling world financial markets.
China's central bank earlier this week cut its lending rate for the
first time in six years, a move analysts said was aimed at bolstering
the economy and the battered stock market.
"The eruption of the U.S. sub-prime crisis has exposed massive
loopholes in the United States' financial oversight and supervision,"
writes the commentator, Shi Jianxun.
"The world urgently needs to create a diversified currency and
financial system and fair and just financial order that is not
dependent on the United States."
But Vice Premier Wang Qishan, on a visit to the United States, told
U.S. trade officials in a meeting on Tuesday that China and the United
States needed to maintain close economic ties with global markets
going through such turbulence.
"The Chinese government is well aware of the fact that the United
States, which is the world's largest developed country, and China,
which is the world's largest developing country, should have
constructive and cooperative economic and trade relations," he said.
China is a major buyer of U.S. Treasury bonds, and through its
sovereign wealth fund it has taken stakes in two large U.S. financial
institutions.
In July 2005, China revalued the yuan and freed it from a dollar peg
to float within managed bands. But the yuan and China's trade remains
tightly linked to the fortunes of the dollar.
The commentary suggested China must brace for grave economic fallout
and look to alternatives, saying the crisis brings to mind the Great
Depression of the 1930s.
"Lehman Brothers announced bankruptcy will not only have a domino
effect on the global financial world, it will bring a shock to the
world economy," the front-page comment stated.
xieu...@gmail.com
Sep 28, 2008, 7:42:43 AM9/28/08
to World-thread
It seems that people did not miss time to react to that article.
Europe (Eurozone) very clearly supports to start these talks.
`The dollar will remain a very reliable and important currency, as
well as the euro as well as the yuan and the yen, so I think it will
perhaps be the starting point of some changes.'' (German Finance
Minister Peer Steinbrueck on Sept. 25).
The French president, Nicholas Sarkozy wants the world's major
industrial powers to convene at a special summit before the end of the
year and start to construct, from scratch, a new financial and
monetary framework, which would replace the US-dominated system set up
at Bretton Woods in 1944.
On the other hand, it seems to me that there are another side that
claims a new baking system, but not entering into changing the whole
financial system nor the monetary system. Gordon Brown, British
premier, seems to be the champion of this thought. He would prefer to
work through the IMF and G7 finance ministers, both due to meet in
Washington next month. This thought just want a certain common ground
and common regulatory rules on banking system, not going further
Everybody now the reaction in other important countries such as USA,
Saudi Arabia or Russia.
Therefore, the only question mark is Japan. Unfortunately they have a
very new government, thus they are still landing. Its finance and
financial services minister Mr. Nakagawa, and his premier Mr. Aso, are
still landing on domestic issues, he has not reacted yet to this
proposal. In my opinion, everything depends now now on thier opinion.
If Japan supports a new Bretton Woods, that is what will happen, if
Japan supports just a regulatory system for banking indistry that is
what will happen in the short term.
In the medium term, some years ahead, there is no option. The whole
system will be redefined.
Peace and best wishes.
Xi
Europe (Eurozone) very clearly supports to start these talks.
`The dollar will remain a very reliable and important currency, as
well as the euro as well as the yuan and the yen, so I think it will
perhaps be the starting point of some changes.'' (German Finance
Minister Peer Steinbrueck on Sept. 25).
The French president, Nicholas Sarkozy wants the world's major
industrial powers to convene at a special summit before the end of the
year and start to construct, from scratch, a new financial and
monetary framework, which would replace the US-dominated system set up
at Bretton Woods in 1944.
On the other hand, it seems to me that there are another side that
claims a new baking system, but not entering into changing the whole
financial system nor the monetary system. Gordon Brown, British
premier, seems to be the champion of this thought. He would prefer to
work through the IMF and G7 finance ministers, both due to meet in
Washington next month. This thought just want a certain common ground
and common regulatory rules on banking system, not going further
Everybody now the reaction in other important countries such as USA,
Saudi Arabia or Russia.
Therefore, the only question mark is Japan. Unfortunately they have a
very new government, thus they are still landing. Its finance and
financial services minister Mr. Nakagawa, and his premier Mr. Aso, are
still landing on domestic issues, he has not reacted yet to this
proposal. In my opinion, everything depends now now on thier opinion.
If Japan supports a new Bretton Woods, that is what will happen, if
Japan supports just a regulatory system for banking indistry that is
what will happen in the short term.
In the medium term, some years ahead, there is no option. The whole
system will be redefined.
Peace and best wishes.
Xi
xieu...@gmail.com
Oct 2, 2008, 6:39:50 PM10/2/08
to World-thread
My comments:
Here is the reaction from Russia.
"Our common evaluations of the economic model that has brought about
this crisis are largely identical. Apparently, attempts of one state
to dictate its rules of the game do not work.” ... "“The issue on the
agenda is cooperation in financial matters, including support for the
creation of alternative financial centers, joint efforts to formulate
universal rules of the game applicable to all, cooperation in
reforming international financial and economic system on the whole.”
As anybody could expect.
http://www.itar-tass.com/eng/level2.html?NewsID=13131969&PageNum=0
ST. PETERSBURG, October 2 (Itar-Tass) -- Russian President Dmitry
Medvedev has called on ‘extra-regional powers’ not to try to put
pressures on the implementation of the Nord Stream project.
At the interstate consultations with Germany’s Chancellor Angela
Merkel within the framework of the St. Petersburg Dialogue forum on
Thursday Medvedev said “the benefits of this project are obvious and
it will be useful to all participants.”
“We are hoping for the project’s progress. Also we expect that all
extra-regional powers that have no bearing on the affair will not try
to influence it,” Medvedev said.
“Germany’s idea of cooperation in the Partnership for Modernization
format looks very successful to us. Such partnership is based on
qualitatively new aspects. It confirms their viability and we shall be
prepared to work on this project further on,” he said. “We would like
to hear from government ministers what is to be done to step up
cooperation in demography and energy efficiency. We have just
discussed this question with businesses, we have very many good ideas
in the sphere of scientific and education exchanges and in other
spheres of social importance. We are extremely interested in specific
results and we do hope that they will materialize.”
“Esteemed German partners, this meeting of ours is being held against
the background of an extremely acute situation in the world financial
markets,” Medvedev told the audience. “We shall not analyze this
situation anew. The causes are well-known. Our common evaluations of
the economic model that has brought about this crisis are largely
identical. Apparently, attempts of one state to dictate its rules of
the game do not work.”
Medvedev said that Russia had created a considerable safety margin
that would allow it to go ahead with the modernization program and
create conditions for a new investment wage.
“Of course, we would like to have cooperation in that sphere,” said.
“The issue on the agenda is cooperation in financial matters,
including support for the creation of alternative financial centers,
joint efforts to formulate universal rules of the game applicable to
all, cooperation in reforming international financial and economic
system on the whole.”
“And, of course, important to us are traditional spheres of
cooperation in the economy, energy, transport infrastructures,
automobile industry, aircraft-building and high technology
industries,” he added.
> ...
>
> read more »
Here is the reaction from Russia.
"Our common evaluations of the economic model that has brought about
this crisis are largely identical. Apparently, attempts of one state
to dictate its rules of the game do not work.” ... "“The issue on the
agenda is cooperation in financial matters, including support for the
creation of alternative financial centers, joint efforts to formulate
universal rules of the game applicable to all, cooperation in
reforming international financial and economic system on the whole.”
As anybody could expect.
http://www.itar-tass.com/eng/level2.html?NewsID=13131969&PageNum=0
ST. PETERSBURG, October 2 (Itar-Tass) -- Russian President Dmitry
Medvedev has called on ‘extra-regional powers’ not to try to put
pressures on the implementation of the Nord Stream project.
At the interstate consultations with Germany’s Chancellor Angela
Merkel within the framework of the St. Petersburg Dialogue forum on
Thursday Medvedev said “the benefits of this project are obvious and
it will be useful to all participants.”
“We are hoping for the project’s progress. Also we expect that all
extra-regional powers that have no bearing on the affair will not try
to influence it,” Medvedev said.
“Germany’s idea of cooperation in the Partnership for Modernization
format looks very successful to us. Such partnership is based on
qualitatively new aspects. It confirms their viability and we shall be
prepared to work on this project further on,” he said. “We would like
to hear from government ministers what is to be done to step up
cooperation in demography and energy efficiency. We have just
discussed this question with businesses, we have very many good ideas
in the sphere of scientific and education exchanges and in other
spheres of social importance. We are extremely interested in specific
results and we do hope that they will materialize.”
“Esteemed German partners, this meeting of ours is being held against
the background of an extremely acute situation in the world financial
markets,” Medvedev told the audience. “We shall not analyze this
situation anew. The causes are well-known. Our common evaluations of
the economic model that has brought about this crisis are largely
identical. Apparently, attempts of one state to dictate its rules of
the game do not work.”
Medvedev said that Russia had created a considerable safety margin
that would allow it to go ahead with the modernization program and
create conditions for a new investment wage.
“Of course, we would like to have cooperation in that sphere,” said.
“The issue on the agenda is cooperation in financial matters,
including support for the creation of alternative financial centers,
joint efforts to formulate universal rules of the game applicable to
all, cooperation in reforming international financial and economic
system on the whole.”
“And, of course, important to us are traditional spheres of
cooperation in the economy, energy, transport infrastructures,
automobile industry, aircraft-building and high technology
industries,” he added.
>
> read more »
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