Friday, October 06, 2006

siraj, sweetie,

you've been in malaysia too long. it was tragic how so many people lost their lives on 7/27, and just awful how you were there when it happened. but i don't think the world is going to war, cookie. justice will prevail. it'll be all right. i'm sure of it.

btw, since you were all on the subject of finance, i've posted an article an i found i thought u wonkz would find interesting. personally, i don't think it will ever happen.

you have to remember, for every man beating his chest, blood thick with testosterone (poor thingz) and bleating a battle cry, there's also a woman at home, calling from the kitchen, saying, 'dear, would you please shut off the news, calm down and take out the trash'.

mmm, on second thought i think i just figured out why men do go to war.


China argues to replace US dollar

China's central bank has reiterated its call for a new reserve currency to replace the US dollar.

The report from the People's Bank of China (PBOC) said a "super-sovereign" currency should take its place.

Central bank chief Zhou Xiaochuan has loudly led calls for the dollar to be replaced during the financial crisis.

The bank report called for more regulation of the countries that issue currencies that underpin the global financial system.

"An international monetary system dominated by a single sovereign currency has intensified the concentration of risk and the spread of the crisis," the Chinese central bank said.

The dollar fell after the report was released. The US currency dropped 1% against the euro to $1.4088, and declined 0.8% versus the British pound to $1.6848.


Mr Zhou caused a stir earlier this year when he said the dollar could eventually be replaced as the world's main reserve currency by the Special Drawing Right (SDR), which was created as a unit of account by the IMF in 1969.

The PBOC said in the report that not only should the world adopt the SDR, but that the IMF should be entrusted with managing a portion of its member countries' foreign currency reserves.

"To avoid intrinsic shortcomings in using a sovereign currency as a reserve currency, we need to create an international reserve currency that is divorced from sovereign states and can maintain a stable value over the long term," the PBOC report said.

It also issued some veiled criticism of the US policies, saying that one of the major issues was that it was difficult to balance the needs of domestic politics with the requirements of being the world's reserve currency.

"The economic development model of debt-based consumption is most difficult to sustain," the PBOC said.

Russian President Dmitry Medvedev recently joined Mr Zhou in saying it was time to consider an alternative benchmark currency for international debt.

But Russian finance minister Alexei Kudrin then said "it's too early to speak of an alternative".

BBC News