China Calls For International Oversight Of The US Dollar, Suggests Single Global Currency Replace It

China is demanding “international supervision over the U.S. dollar”
and says they are looking at the option of creating a new single global
currency to replace the dollar altogether.

China has published an article in its stated owned Xinhua news agency
that rails against the United States for losing its AAA credit rating
and has issued a series of demands to U.S. policy makers and the
international community.

China begins by railing against the “arrogance and cynicism from some
Western commentators” in regard to the credit rating downgrade of U.S.
debt that was issued by China’s Dagong Global credit rating agency last
year and goes on to state that they have the right to demand the U.S.
address its debt problem to protect the Chinese dollar.

In concluding the article China is calling upon the international
community to intervene with a program of “international supervision over
the U.S dollar” while indicating they are looking at the option of
creating a global currency to replace the dollar altogether.

China Calls For International Supervision Over The US Dollar And New, Single Global Currency To Replace It

Zero Hedge reports:

Gloating China Says “Has Every Right To Demand US Address Its Debt Problem”, Asks For New Global Reserve Currency

Submitted by Tyler Durden

08/06/2011 11:21 -0400

China has released a scathing op-ed in Xinhua,
the official Chinese news agency, in which the authors waste no time to
humiliate a “debt-ridden Uncle Sam” following the S&P; downgrade, in
the most violent surge in the recent war of words between the ascendent
and descendent superpowers. Some choice selections: “Dagong Global, a
fledgling Chinese rating agency, degraded the U.S. treasury bonds late
last year, yet its move was met then with a sense of arrogance and
cynicism from some Western commentators. Now S&P; has proved what its
Chinese counterpart has done is nothing but telling the global
investors the ugly truth”, “China, the largest creditor of the world’s
sole superpower, has every right now to demand the United States to
address its structural debt problems and ensure the safety of China’s
dollar assets.” It doesnt stop there, “[the US] should also stop
its old practice of letting its domestic electoral politics take the
global economy hostage and rely on the deep pockets of major surplus
countries to make up for its perennial deficits.” China takes
the opportunity to give the US a little lecture on a broken way of life:
“All Americans, both beltway politicians and those on Main Street, have
to do some serious soul-searching to bring their country back from a
potential financial abyss.” And lastly, China once again gets back to
its pissing contest about whose reserve currency is bigger: “International
supervision over the issue of U.S. dollars should be introduced and a
new, stable and secured global reserve currency may also be an option to
avert a catastrophe caused by any single country.” Just wild fun. Read the whole thing below.

From Xinhua:

After historic downgrade, U.S. must address its chronic debt problems

The days when the debt-ridden Uncle Sam could leisurely squander
unlimited overseas borrowing appeared to be numbered as its triple
A-credit rating was slashed by Standard & Poor’s (S&P;) for the
first time on Friday.

Though the U.S. Treasury promptly challenged the unprecedented
downgrade, many outside the United States believe the credit rating cut
is an overdue bill that America has to pay for its own debt addition and
the short-sighted political wrangling in Washington.

Dagong Global, a fledgling Chinese rating agency, degraded the U.S. treasury bonds late last year, yet its move was met then with a sense of arrogance and cynicism from some Western commentators. Now S&P; has proved what its Chinese counterpart has done is nothing but telling the global investors the ugly truth.

China, the largest creditor of the world’s sole superpower,
has every right now to demand the United States to address its
structural debt problems and ensure the safety of China’s dollar assets.

To cure its addiction to debts, the United States has to reestablish
the common sense principle that one should live within its means.

S&P; has already indicated that more credit downgrades may still follow. Thus, if no substantial cuts were made to the U.S. gigantic military expenditure and bloated social welfare costs,
the downgrade would prove to be only a prelude to more devastating
credit rating cuts, which will further roil the global financial markets
all along the way.

Moreover, the spluttering world economic recovery would be very
likely to be undermined and fresh rounds of financial turmoil could come
back to haunt us all.

The U.S. government has to come to terms with the painful fact that
the good old days when it could just borrow its way out of messes of its
own making are finally gone.

It should also stop its old practice of letting its domestic
electoral politics take the global economy hostage and rely on the deep
pockets of major surplus countries to make up for its perennial deficits.

A little self-discipline would not be too uncomfortable for
the United States, the world’s largest economy and issuer of
international reserve currency, to bear.

Though chances for a full-blown U.S. default are still slim now, the
S&P; downgrade serves as another warning shot about the long-term
sustainability of the U.S. government finances.

International supervision over the issue of U.S. dollars
should be introduced and a new, stable and secured global reserve
currency may also be an option to avert a catastrophe caused by any
single country.

For centuries, it was the exuberant energy and innovation that has
sustained America’s role in the world and maintained investors’
confidence in dollar assets. But now, mounting debts and ridiculous
political wrestling in Washington have damaged America’s image abroad.

All Americans, both beltway politicians and those on Main
Street, have to do some serious soul-searching to bring their country
back from a potential financial abyss.

The events in this video look more and more likely every day.

Reuters also reported on the Xinhua article and added that China will now be forced to dump the U.S. dollar.

The downgrade of U.S. credit rating is expect to take a major toll on
China’s over $2 trillion in investments in the U.S. dollar.

With no where else to put all of that money China will be forced to invest it into a one world currency.

Reuters reports:

China blasts U.S. over debt problems, calls for dollar oversight

SHANGHAI | Sat Aug 6, 2011 2:35am EDT

(Reuters) – China
roundly condemned the United States for its “debt addiction” and “short
sighted” political wrangling and said the world needed a new stable
global reserve currency.

In a harshly-worded commentary by the official Xinhua news agency on
Saturday, China gave its first official comments on the United States
losing its gilded AAA long-term credit rating from Standard &
Poor’s.

[...]

Chinese economists said the U.S. credit rating downgrade posed a great risk to financial markets
and they expected it to prompt China, the world’s biggest holder of
U.S. Treasuries, to accelerate the diversification of its holdings.

S&P; cut the United States’ rating to AA-plus on concerns over the
government’s budget deficits and rising debt burden. The move is likely
to raise borrowing costs eventually for the U.S. government, companies
and consumers.

“There would be chaos in international financial markets at least in
the short term. The most direct impact for China would be the hit on its
reserves. The value of China’s dollar investments will fall and the
shrinking effect may be great,” said Li Jie, a director at the Reserves
Research Institute at the Central University of Finance and Economics.

Earlier this week, China had urged Washington to act responsibly to deal
with its debt issues, saying uncertainty in the U.S. Treasuries market
will undermine the global monetary system and hamper global growth.

Beijing has repeatedly urged Washington to protect its dollar
investments, estimated by analysts to account for about two-thirds of
its $3.2 trillion in foreign exchange reserves, the world’s largest.

“China will be forced to consider other investments for its reserves.
U.S. Treasuries aren’t as safe anymore. There is a class of assets out
there that are more risky than AAA, but less risky than AA+. China
didn’t consider these investments before, but now it would be forced to
do so,” Li said.

[...]

Source: Reuters