Whither the Dollar?

This "surprise proposal" bodes ill for its future — China calls for new global currency. The proposal comes from Beijing's central bank governor, Zhou Xiaochuan, who "did not mention the dollar by name" but took "unusual step" of having "the essay... published in both Chinese and English, making clear it was meant for a foreign audience."

"I don't believe that there's a need for a global currency," said the American president. "The reason the dollar is strong right now is because investors consider the United States the strongest economy in the world with the most stable political system in the world." Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke both "categorically renounce[d] the United States moving away from the dollar and going to a global currency."

However, Gary North suggested that it was "the prospects of the destruction of the dollar and the bankruptcy of the government" that "drove up the Dow by almost 500 points" — Save the Big Banks, Trash the Dollar. He also writes of "a perpetual bailout offered by the People's Bank of China" in which "[t]he PBOC is expected to create new yuans (inflationary), use these newly created yuan to buy U.S. dollars, and then use these dollars to buy U.S. Treasury debt, enabling the Treasury to fund its rapidly escalating debt at T-bill interest rates no higher than 0.25% per annum."

Richard Spencer posts a video that explains the situation in clear terms — Old Right Glenn Beck? "I never thought I’d hear a speech like this on conservative talk radio (unless Jack Hunter were at the mic, of course)," he says: