China’s Central Bank Official Calls For New Monetary System, Offers Next Step In Removing Dollar From Reserve Currency Status
http://investmentwatchblog.com
It was just one day ago that we wrote the following: “The fact is that the US is currently exporting their (monetary) inflation. Lots of the newly created dollars end up at foreign central banks making abroad currencies weaker. But … the dollar is increasingly disliked and bypassed in trading agreement of the BRICS as we reported here, here, and here.”
Almost at the same moment of writing, an article appeared from Yao Yudong, one of the officials of the People’s Bank of China’s monetary policy committee, in which “he calls for a new Bretton Woods system to strengthen the management of global liquidity”. According to Zerohedge, “Yao called for more power to the IMF as international copperation and supervision are needed. [...] Contrary to prevailing misconceptions that the SDR may be the currency of the future, China just may opt to have its own hard asset backed optionality for the future.”
For readers that are not too familiar with Bretton Woods, the following excerpt is a good summary. It appeared in a recent paper “Real vs False Money” written by Claudio Grass from Global Gold Switzerland.
Monetary History: monetary system of Bretton Woods (1945 – 1968)
In July of 1944, representatives of 44 nations gathered at Bretton Woods to discuss the post-war international monetary system. It was decided that the US Dollar and Gold would become the sole reserve currencies. The outcome was nothing more than America dictating the US Dollar’s official supremacy. The USD should become the only currency convertible into gold by foreign central banks. So all the world currencies were expressed in terms of and closely tied to the US Dollar. In turn, the dollar was still fixed to Gold. Only the United States could change the price of Gold meaning all other nations were forced to either increase the value or devalue in terms of Dollars.
On Aug. 5, an official from the People’s Bank of China (PBoC), published an article in a leading Chinese market journal suggesting that now would be a good time to convene a new ‘Bretton Woods‘ conference with the intention of creating and implementing a new gold backed reserve currency to replace the dying dollar.
http://www.examiner.com/article/china-offers-next-step-removing-dollar-from-reserve-currency-status
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