It's kind of funny how the IMF (International Monetary Fund) has gone from irrelevance to center stage in just a matter of months. Following quickly on the heels of last week's news that the Federal Reserve plans to print up another trillion dollars came this announcement that a UN panel wants to replace the greenback with a shared basket of currencies.
Monday, according to this Reuters report (hat tip MA), China loudly seconded the plan.
Earlier Monday, China’s central bank governor, Zhou Xiaochuan, offered a bold proposal to overhaul the global monetary system and replace the dollar with the IMF SDR (Special Drawing Right).
The SDR, an international reserve asset created by the IMF in 1969 but little used since that time, has the potential to act as a super-sovereign reserve currency, eliminating risks inherent in any single currency used for that purpose.
In a speech that took the unusual step of being issued in both Chinese and English, Mr. Zhou was careful not to mention any "specific" currency that the SDR might replace....
Norton's comment: Brazil and China are coordinating for more mutual trade and interested in ditching the US Dollar. Watch EWZ, FXI...
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