Tuesday, March 24, 2009

Dollars to donuts

"China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

In an essay posted on the People’s Bank of China’s website, Zhou Xiaochuan, the central bank’s governor, said the goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”."

Wow. We don't exactly need any more dislocation. As you can see from the WSJ chart above, it has been flattening out but has a lot of room to go down is that's going to be the direction.

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