Thursday, July 9, 2009

China and France want US Dollar out!

Interesting day today. It has been a very weird trading day, wallstreet slightly up, dollar looked like it was losing it's value against the EUR crossing the 1.40 mark, but lately seemed to recover back under the 1.4o range, luckily I didn't make any trades, that's why there are no pretty charts today :P, thank goodness, I would've been in the hole.
But here's the issue I want to address that kind of made my blood boil.
China now for awhile has been pushing this debate of pushing the USD off the board as the global reserve currency. And now France has joined China in that matter. Absolute nonsense if you ask me. France and especially China need the US and the USD whether they like it or not. China has a lot of US currency in reserve that's why they're freaking out and it makes sense. Carrying so many investments in a currency that's not your own, they has reason to worry. But they don't seem to understand that the USD is holding up pretty well in this severe recession, and it's not going to take long for it to be over. Changing the world currency to another is such a complex process and whether or not that will succeed is just a risk we can't afford in an unstable global economy at the moment. If you want something like that to be done, do it when the economy is stable and have the time and funding to adjust the world economy to a global currency change. Once again this is China hammering on issues they're not familiar with, they somehow don't seem to understand the complexity of a world economy. They just opened the borders not that long ago and started emerging in a global market. They have a annual growth rate that most countries would only dream of, but keep in mind that they put their economy on the fast track, disregarding any environmental rules, it's sickening what's going on with China, and now they have the balls to come out and try to modify the global world markets just for their own benefit? How about you fix your problems in your own county first (human rights, environmental policy etc) once you have that settled you would've have some kind of credibility towards the issue of replacing the world currency, like France.

Read this story on CNBC regarding this issue;
China Demands Currency Reform, France Backs Debate

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