Can A New World Currency Displace The Dollar?
For years, U.S. Treasury notes have been a safe place for world governments to park their foreign currency holdings. But all of a sudden, the U.S. is running up trillion-dollar deficits. Now, China is raising concerns about the U.S. dollar’s dominant position in the world economy. The head of China’s central bank this week said the world should consider creating a new international reserve currency. Russia this month took a similar position; so did a United Nations panel. Kenneth Rogoff, former chief economist at the International Monetary Fund, says it’s no coincidence that China, Russia and other countries are getting nervous. “They realize that these Treasury bills they have might not be worth so much five or 10 years from now. There might be inflation,” Rogoff says. “And so I think countries like China and Russia are starting to rethink whether there should be an international reserve currency run by some organization like the International Monetary Fund.” China earns massive reser
