October 08, 2008
Is Bretton Woods II Dead?
The coordinated rate cuts by central banks around the globe today included China. The faded G7 powers and their corporate and state-owned (BBC, for example) press still view the so-called "subprime," "credit," "liquidity," financial crisis as an Atlantic Alliance issue. Nothing could be further from the truth. China is at the core of the financial system as much as the USA since they both depend on the "Bretton Woods II" regime of financing trade deficit with borrowed dollars. For years the USA has agreed with China that 'you buy our goods, we buy your debt.' That system is now unravelling.
A week ago the President of France Nicholas Sarkozy said "Laissez-faire is finished." He joined the call first made last year by outgoing German Chancellor Gerhard Schroeder for a G7 summit to fix the world's financial mess.
But what we really need is a Bretton Woods III conference where the USA, the EU, and China sit down and hammer out what the world's financial future will be. Certainly rich holders of dollars such as Japan, Russia, and financial centers of the Middle East should be there too as important participants.
If the future will be multipolar balanced by the dollar, the Euro, the Yen, Renminbi (Yuan), and Gold, as famous gloomsayer Mark Faber forecasts, then we need to get together now to craft a new system.
Labels: bretton woods ii, dollar, financial crisis, foreign exchange, gold, yuan
April 02, 2008
Is Renminbi The Future Reserve Currency?
According to Morgan Stanley's global economic group:
Of course this is big picture and looong term (decades if not more). Something to think about just the same."In the long run, the most likely contender to the USD as the dominant
international reserve currency, in our opinion, is likely to be an Asian
currency centred on the Chinese RMB."
Labels: bretton woods ii, china, currency, dollar, globalization, renminbi, rmb, yuan
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