China, Russia call to replace dollar as global reserve currency

Update: President Obama rejected the claims of replacing the dollar as the global reserve currency. Obama said that the United States is considered “the strongest economy in the world with the most stable political system,” and described the dollar as “extraordinarily strong”.

Zhou Xiaochuan, the governor of the Chinese Central Bank, is calling to replace the dollar as the main global reserve currency, citing the dangers of the current economic crisis on heavily relying on one currency essentially controlled by the west.

Zhou said, “A super-sovereign reserve currency managed by a global institution could be used to both create and control global liquidity.”  Zhou wants the global currency to be overseen by the International Monetary Fund (IMF). Zhou added creating a new global currency would, significantly reduce the risks of a future crisis,”

China says it wants a new global currency that is weighted with the values of the major currencies of the world including the dollar, the yen, and the sterling, among others.

China is believed to have at least $1.2 trillion in US currency of its $2 trillion strong currency reserves.

China’s concern is if the U.S. begins to print money to pay debt and stimulate the economy, its own currency will lose significant value.

Most recently, about a week ago, the top Russian bank was also pushing for a new global reserve currency for the same reasons and to also strengthen Russian influence in the world.

Analysts don’t believe the dollar will be replaced anytime soon.

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Hercules holds a B.Comm Finance from Ryerson University in Toronto, Canada. He is a Chartered Financial Analyst (CFA) level 3 candidate. He was previously a contributor at FiLife, a finance website owned by Dow Jones and IAC. Write to [email protected]
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  • Peter

    not by a long shot is this going to happen, not only can we not let it happen, it wont happen.

  • John Davis

    OK thats getting kind of scary dude!

  • BobTheNuklularPhysist

    One World Currency here we come. NWO on the way.

  • Hercules K

    There are many rumors the EU could break up because of protectionism and the current economic conditions…. i wonder what would happen to the EUR then…

  • Chris

    Looks like a classic case of buyers remorse to me.

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