Damnit Jim, I'm a Librarian, not an Economist.
First an apology. This is my first diary on Kos, so please excuse sins again the English language, defiling the altar of the great god punctuation, or other niggling things that make our eyes taste like burning.
Perusing the BBC at lunch I came across this bit:
China's central bank has called for a new global reserve currency run by the International Monetary Fund to replace the US dollar.
http://news.bbc.co.uk/...
This strikes me as bad. I know that this was apparently a threat threat in 2007, but it again rears its ugly head. The Telegraph article linked above, suggests such a move could have, in 2007, destroy the US economy. I suspect many would argue that the current economy is on life support.
I'm not an economist, but this sounds dangerous.
I've always viewed the situation in regards to China/US debt to be a symbiotic (mutualistic) relationship. This relationship relies on the US to generate debt/dollars/bonds and the Chinese to purchase the debt/dollars/bonds and thus prop our economy. This isn't some altruistic act, there's something in it for them.
The catch I've always thought was how can China uncouple itself from this debt or cash in? To do so would destroy both parties. The US cannot pay the debt it owes the Chinese. At worst it would be a situation of brinksmanship, wherein the Chinese would threaten to sell and the US would threaten something (force). That said in what manner will the US react, or act, to such a statement?
Is this another threat to the US to test the Obama administration, or is this some greater move to continue the marginalization of the US as an economic power? As seen from my use of economic terms like bad, I'm wading in unfamiliar waters.
Thoughts?