I think that their eventual goal would be to diversify their reserves into a basket, but it’s not something that’s easily done overnight. But China has to be worried about having over a trillion USD in reserves and the potential for the USD to weaken. I know I would be 
Yes, you nailed it. This is basically Chinese economic saber-rattling. The Chinese are worried, and rightly so, that their huge reserves of U.S. dollars might lose value, due to the reckless, inflationary policies of the U.S. government.
They are saying to the U.S., in effect, “we are holding a ton of your dollars, we don’t like the way you are debasing the dollar, and if you don’t take our concerns seriously, we might stop lending money to you, and we might start agitating for a new world reserve currency”.
They will continue to put the U.S. on notice, in this way, until the dollar is stabilized.
As for replacing the U.S. dollar as the world’s primary reserve currency, it isn’t going to happen in the foreseeable future. It will, however, be talked about, off and on, forever. The euro, the yuan, and SDR’s (from the IMF) will be touted as “replacements” for the dollar.
Several posts back, this thread got off on a tangent — about the “immorality” of speculating in currencies.
Generally, I think that posters should stick to the original topic of each thread, and avoid tangents. However, I can’t resist following that particular tangent, at least a little bit further.
I posted a long piece on speculating and gambling, some time ago, and I’d like to copy and paste a couple of paragraphs from that post.
The two most important groups of participants in the forex market are (a) commercial interests (e.g., Toyota converting euros from sales in Germany into yen deposits in Japan), and (b) speculators, who take positions purely for the purpose of making a profit by buying low and selling high, or vice versa. These two groups have a symbiotic relationship.
Commercial interests are the reason the forex market exists; and, because it exists, it offers speculators the profit opportunities they seek.
Speculators, for their part, provide a vital service to the commercial interests by providing ample, round-the-clock liquidity to the forex market, and by assuming currency-risk which the commercial interests choose to shed. The risk assumed by speculators is not artificially created for their entertainment: it exists by virtue of world trade, and it must be borne either by the commercial interests themselves, or by speculators who are willing to assume it. World trade would be negatively impacted if currency-risk could not be transferred from those wanting to avoid that risk, to those willing to assume it.
So, from the macro perspective, as long as there are national currencies and international trade, currency speculators will provide a vital service to the world economy and to society at large, by providing the mechanism by which commercial interests can shed risk which they choose not to bear. And this is not gambling.
Here’s a link to the entire post: 301 Moved Permanently
Clint
I feel better from a moral perspective now. Great post and thanks for reposting that piece!
My last post here was in March, 2009.
In view of a one world currency have a look at this…
Fading of the Dollar’s Dominance
washingtonpost.com - nation, world, technology and Washington area news and headlines
The days of calling the dollar almighty may be numbered.
Since World War II, when the dollar eclipsed the British pound as the king of world currencies, the United States has reaped the rewards of its monetary strength. The greenback’s sense of indestructibility allowed the U.S. government to borrow cheaply and gave rise to an era of rich American globetrotters toting the world’s most easily convertible form of cash.
But the financial crisis that started in the United States is dramatically intensifying the debate over the future of the dollar, and whether it can, or should, remain at the top of the financial food chain. Although a meaningful shift away from the dollar is likely to take years or more, some analysts believe that the debate is now reaching a tipping point.
Last week, the leaders of Brazil, Russia, India and China – whose governments are some of the world’s largest dollar holders – jointly declared the need for a “more diversified international monetary system,” sparking a drop in the greenback on world markets. In recent months, China in particular has led a campaign for a new world monetary order, arguing that the financial crisis has exposed profound vulnerabilities in the U.S. economy and financial system. Those flaws, critics argue, show it is simply too risky for the world’s central banks to rely largely on the dollar for their global reserves.
…
……
Though it may take years before such agreements have any real impact on the dollar, they are coming at a time when governments around the world may find another potential substitute for their dollar reserves: the IMF’s Special Drawing Rights.
The SDRs are a currency-like asset whose value is based on the dollar, the pound, the euro and the yen. They have been issued by the IMF, albeit in highly limited form, since the 1960s to aid nations in need of reserves.
In response to the above post in March this year, we now have the following news…
India Joins Russia, China in Questioning U.S. Dollar Dominance
Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.
�The major part of Indian reserves is in dollars – that is something that�s a problem for us,� Tendulkar, chairman of the Prime Minister�s Economic Advisory Council, said in an interview yesterday in Aix-en-Provence, France, where he was attending an economic conference.
Singh is preparing to join leaders from the Group of Eight industrialized nations – the U.S., Japan, Germany, Britain, France, Italy, Canada and Russia – at a summit in Italy next week which is due to tackle the global economy. China and Brazil will also send representatives to the summit.
As the talks have neared, China and Russia have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.
�There should be a system to maintain the stability of the major reserve currencies,� Former Chinese Vice Premier Zeng Peiyan said in a speech in Beijing yesterday, highlighting China�s concerns about a global financial system dominated by the dollar.
Fiscal and current-account deficits must be supervised as �your currency is likely to become my problem,� said Zeng, who is now the head of a research center under the government�s top economic planning agency. The People�s Bank of China said June 26 that the International Monetary Fund should manage more of members� reserves
.
Russian Proposals
Russian President Dmitry Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the dollar�s future as a global reserve currency. Russia�s proposals for the Group of 20 major developed and developing nations summit in London in April included the creation of a supranational currency.
�We will resume� talks on the supranational currency proposal at the G-8 summit in L�Aquila on July 8-10, Medvedev aide Sergei Prikhodko told reporters in Moscow yesterday.
Singh adviser Tendulkar said that big dollar holders face a �prisoner�s dilemma� in terms of managing their holdings. �That�s why I�m telling them to do this,� he said.
He also said that world currencies need to adjust to help unwind trade imbalances that have contributed to the global financial crisis.
�The major imbalances which led to the current situation, the current account surpluses and deficits, have to be addressed,� he said. �Currency adjustment is one thing that suggests itself.�
Emerging-Market Dependence
For all the complaints about the dollar, emerging markets such as India remain dependent on the currency of the U.S., the world�s largest economy and a $2.5 trillion export market. The IMF said June 30 that the share of dollars in global foreign- exchange reserves increased to 65 percent in the first three months of this year, the highest since 2007.
Tendulkar said that the matter needs to be taken up in international talks, and that it emphasizes the need for those talks to go beyond the traditional G-8.
�They can meet if they want to,� he said. �The G-20 has a wider role, has representation of the countries that are likely to lead the recovery process.�
my buddy & I were talking about this the other day… ;
New Global Currency?
…I posted this on a forum I follow & would love feedback.
My view is that there is already a ‘global’ currency. It’s called, ‘currency.’ The creation of a NEW currency in which many nations participate in the establishment of, could help ail some of the instability worries many are expressing. This would by no means eliminate the currencies the nations already use. I think the public at large hears talk of this & envisions what currently is occupying their wallets will change. I’m more anticipating a global currency which is held moreso by governments & businesses for purpose of international trade. This could eliminate much of the analysis necessary & pitfalls caused by price volatility which is completely unrelated to their industry. Who would participate in the creation of this type of currency, I think, is the key to understanding how it will affect the markets as we know them.
If anything, it could be a HUGE opportunity for those of us who understand the dynamics of the currency market .vs. Joe Schmoe…
As always though, those participants who are more stable upon inception of said currency obviously should have more ‘buying power’ & thus a lot of the instability essentially gets ‘priced in’ to the value. If the new currency is supposed to be more stable for interchanging, wouldn’t those that hold more of it still have the upper hand that was present prior to the creation?
I’d love feedback on this as I’m going way out on a speculative limb here…
Posted by Zeke Logan at
[I]A Colleague’s Response
…here’s what a friend of mine, who is Head of Equities at one of the largest firms in Russia, had to say regarding the global currency post below:
[B]“Cool. i like. everyone should think with a global currency. we don’t live in an isolated world anymore, but a full fledged global economy. Anyone, and I mean anyone, can open an internet acct sell USD to EUR…etc. Russia has $400mln in reserves in USD terms that is made up of 50% USD, 45% EUR and 5% JPY. Smart to do as they are well balanced and hedged against global turmoil in that sense. (they are so exposed to oil price that in the end it doesn’t help, but it does mitigate some downside).”[/B][I]
[I]so you say 400 bln in FX reserves ($ based more or less) is what Russia holds.
bloomberg just had that article on China holding $2 trillion in FX reserves.
That’s about 5:1 China. But, your figure stated EUR,USD,JPY…
Any clue what China’s portfolio looks like for more exotic currencies?
Moreso, how much of that 2 trillion is likely invested in the majors?
…what if we don’t get a NEW global currency, but we ‘un-peg’ the Chinese currencies, allowing them to convert FX profits to their native notes.
Then, as their economy strengthens because of their INSANE consumer savings stockpiles currently held abroad in bonds, equities, FX, etc…, more stability is found because of FX diversity…
If the flow of risk happens to point towards Chinese currencies, and others suffer, we as traders act accordingly and reallocate. No skin off our backs. We profit, they profit, everybody (except Joe Schmoe) is happy.
Laymen here, severely in need of an economic brain [/I]
[B]No!![/B] 
The one world government is tied up with this - and it needs a one world currency, not a conglomeration of what we have already.
The new currency will come out of crisis that are now and coming upon the earth - terrorism, global warming (the cause postulated is false and manufactured to assist in bringing about the one world government), disease, poverty, oil shortage, earthquakes etc.
The new currency will be electronic and make use of an RFID type chip in your right palm or your forehead.
(forehead is for those who are limbless or cannot use their hands - the next most visible part of the body eg women Muslims, is the forehead).
The strenuous emphasis on climate change is a vital part of bringing about a global currency of this sort.
As such, the currency will be carbon footprint based, that is, based on energy.
The need for surveillance against terrorism, thus cutting out our freedoms, is another excuse posted for having a chip based currency.
No one will be able to buy or sell without this chip - total control is now possible - and we can thus solve economic problems, every kind of theft, poverty, get a level playing field, and lots more.
The RFID chip will carry all sorts of information about you on it and can be instantly read by a scanner.
It is one step up from a printed barcode.
Standard barcodes are bounded by three numbers - 666.
I am amazed that even though I say all these things, people see cannot see it.
Surely, it screams at you!!?
[B]I stand against all this - it is all very evil.
The Bible clearly prophesises these things coming about!![/B]
Look at how they are pushing the “enhanced drivers license”, for those frequently traveling between the US and Canada. Much quicker and cheaper than a passport; less hassle than a nexus card. Contains an RFID chip to make border crossing easier. A nice first step into tagging folks with RFID tech, all bundled up in a convenience package to make life easier.
The more I think about it, the more I believe a single currency has a ways to go yet. There is still a lot of big money that play forex (actually it’s mostly big money), and I would think that big money needs to be appeased before eliminating such a huge source of profit.
If we really wanna be paranoid, it’s already over.
Umm… cell phones.
Ahahahhahahahahahahahhahahahahah. I just lost what little respect I had for you. Was the bible the the secret source of information you have that says a one world currency is coming soon?
Seriously every time there is a recession or a war or a major natural disaster all the, “its the end of times,” bible thumpers get up in arms.
Predictions from the bible & nostrodomus and the like happen, when and if they do, because much of the prophecies are just logical eventualities.
It is a logical eventuality that one day the world may one day have a one world government and a one world currency. And it is nothing evil and nothing to fear and not because of the antichrist trying to control everyone and take their souls, lol.
IMO, anyone that thinks it’s going to happen any time soon needs to get out from under a rock, put away the fairy tale books, and watch some REAL news. Five minutes watching any of the US biasd news stations will convince anyone with half a brain that there is simply no world power capable of world domination and enforcement of a one world governement empire, let alone forcing one world currency.
I’m with ya Phoenix.
While I’m not necessarily comfortable with all the access to be had of my personal data due to technological innovations, my days of paranoia are over. The benefits heavily outweigh the drawbacks.
I’m perfectly comfortable with reality, and in the event that things are really ‘Worst Case,’ I know there’s a huge line of folks WAAAAAAY more sinister than I who’ll be targeted in any form of witch hunt/McCarthyism type crisis.
Now, if there’s some sort of Hitler-esque type crisis, it would be squashed immediately. The world’s moral compass has shifted too much to tolerate the scale of which that kind of xenophobia rose to. Never again.
Really, I think it’s the economic crises like we just had/are having that we need to worry about. A few of the rogue leaders running around willy-nilly are a little dangerous as well.
Other than that, it’s same ol’ song-n-dance. Capitalism & Democracy are championed ideas that aren’t going away. The rest of the world will continue to want more of it & those that have it WILL fight for it if it erodes. Hopefully the religious schisms can be filled eventually…
What’s really important, in my humble opinion and to spread the ‘gospel’ of Stephen Hawking, is that we seriously undertake the endeavor of migrating away from our home planet so that we can continue to survive as a species and do what we love to do, exploring.
How ‘bout them apples? How do all us $-savvy folks reckon we can get the capital a-flowin’ into that task?
[I]Monkey killing monkey killing monkey over pieces of the ground.
Silly monkeys.
Give them thumbs, they forge a blade,
And where there’s one they’re bound to divide it right in two.
Monkey killing monkey killing monkey over pieces of the ground.
Silly monkeys.
Give them thumbs, they make a club to beat their brother down.
How they’ve survived so misguided is a mystery.
Repugnant is a creature who would squander the ability
To lift an eye to heaven, conscious of his fleeting time here.[/I]
-TOOL
sums up what I’m trying to say nicely, better than I could say it…
First NEWSFLASH, just in case:
The rock we are crawling over like ants IS IN SPACE already.
Space shuttle just left last night, to really travel in space the shuttle is so primitive, it makes the first Ford-T look like the 8th wonder of the world.
Now you want to migrate away to other planets and poison them for any kind of life, (or life that is there already but we can’t recognize it as such), too?
So far, on this planet, we are handling it just like an elephant in a porcelain store.
Darn, I don’t think this has anything to do with pips
Happy Trading
It is global crisis that will greatly accelerate the push for a one world currency.
I think you can expect firm talk about it beginning at the end of 2010.
That’s not far away.
I think you should have more respect for the Bible than that.
After all, the way of life in your whole country is based on it.
IMO, anyone that thinks it’s going to happen any time soon needs to get out from under a rock, put away the fairy tale books, and watch some REAL news.
The news I have (and its sources) is far more up to date and accurate than anything you have. 
Five minutes watching any of the US biasd news stations will convince anyone with half a brain that there is simply no world power capable of world domination and enforcement of a one world governement empire, let alone forcing one world currency.
It is not world powers that will bring it about - it is crisis coming upon the planet. :eek:
Crisis that I know about and you do not - and because of the blatant scepticism here, I am not going to tell you.
You people will eat humble pie when these things start to happen right before your eyes. 
Well, then I’m out. What a waste of time learning Forex just to have it disappear.
I beg to differ. While the country was mainly founded by Christians, the idea behind America was that ANY form of religion would be tolerated. So would the freedom to criticize any type of religion as well. That includes the bible.
Let’s not the let those crazy fundamentalists fool anyone just because THEY’RE brainwashed about my country’s origins.
USA was founded by Christian’s (mostly), not FOR Christian’s.
Sorry to differ, America, first the Indians where here, then the criminals and low life’s where deported (mainly england), then other country’s followed to deport the criminals and low life’s.
Now more real criminals followed (preachers, all sorts of it).
Very shortly after the immigrants started to come in who liked to get an opportunity for a decent life since Europe knew only 2 groups, very reach and very poor without a chance of getting anywhere.
A halleluia day for the preachers.
Love it
and to be on the safe side, just put the gun to your head and pull the trigger too.