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| Economy |
| US dollar to remain main global currency, says IMF |
| 2010-01-14 |
| The chief of the International Monetary Fund believes the US dollar will maintain its dominance in the currency world despite speculations that it will be soon substituted by the euro or Chinese yuan. "The US currency is going to remain the main currency in my opinion for a long period of time, even if it's challenged by some others," Dominique Strauss-Kahn told the Hong Kong Trade Development Council on Wednesday, AFP reported. Strauss-Kahn called on China to raise the value of its currency, to ease criticisms alleging that Beijing keeps its unit artificially low. Meanwhile, the IMF managing director noted that the international economy would not face a so-called "double-dip" recession, though he described the pace of recovery as sluggish. "Our view is not one of a double-dip," Strauss-Kahn said. "It doesn't mean the probability is zero or that it cannot happen, but it's not our preferred scenario and I don't believe that will be the case." Strauss-Kahn is due to make a keynote address at the Asian Financial Forum next week. |
| Posted by:Fred |
| #1 Strauss-Kahn called on China to raise the value of its currency, to ease criticisms alleging that Beijing keeps its unit artificially low. Which contributes to the monetary problem. Had the Chinese currency floated, it would have, by natural process meant that the increase value/cost of manufacturing in China, forced a decrease in sales or shifting of production elsewhere. That would have thwarted the ability of the Chinese to park their wealth in so many US bonds [and by extension, inhibited the government from borrowing so much], but it would also have meant that China's economic miracle wouldn't have been as big, flashy, and successful as it has been. The Chinese self interest means that they will continue to undervalue their currency to maintain employment at home [even though they've lost millions of jobs already in the global recession] and export unemployment overseas. Unfortunately, its a game of monetary musical chairs when the unemployment overseas ends the ability to buy 'made in China' anyway. That's when it will all start to implode. The central Chinese government hasn't had the 'opportunity' to experience an economic depression during a period of raising expectations by their masses. The people have tasted the 'good' life. May they enjoy the interesting times. |
| Posted by: Procopius2k 2010-01-14 09:42 |