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US backing for world currency stuns markets

Posted By admin On March 27, 2009 @ 10:40 am In Money Watch | Comments Disabled

Ambrose Evans-Pritchard
London Telegraph [1]
Friday, March 27, 2009

US Treasury Secretary Tim Geithner shocked global markets by revealing that Washington is “quite open” to Chinese proposals for the gradual development of a global reserve currency run by the International Monetary Fund.

The dollar plunged instantly against the euro, yen, and sterling as the comments flashed across trading screens. David Bloom, currency chief at HSBC, said the apparent policy shift amounts to an earthquake in geo-finance.

“The mere fact that the US Treasury Secretary is even entertaining thoughts that the dollar may cease being the anchor of the global monetary system has caused consternation,” he said.


US backing for world currency stuns markets  335x205 graph128c aj [2]

Mr Geithner later qualified his remarks, insisting that the dollar would remain the “world’s dominant reserve currency … for a long period of time” but the seeds of doubt have been sown.

The markets appear baffled by the confused statements emanating from Washington. President Barack Obama told a new conference hours earlier that there was no threat to the reserve status of the dollar.

“I don’t believe that there is a need for a global currency. 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,” he said.

Full article here [1]

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URLs in this post:

[1] London Telegraph: http://www.telegraph.co.uk/finance/economics/5050407/US-backing-for-world-currency-stuns-markets.html

[2] Image: http://www.efoodsdirect.com/products.html

[3] Shocking New IMF Report: The U.S. Dollar Needs To Be Replaced As The World Reserve Currency And SDRs “Could Constitute An Embryo Of Global Currency”: http://www.prisonplanet.com/shocking-new-imf-report-the-u-s-dollar-needs-to-be-replaced-as-the-world-reserve-currency-and-sdrs-could-constitute-an-embryo-of-global-currency.html

[4] Australia rate cut stuns, markets thirst for more: http://www.prisonplanet.com/australia-rate-cut-stuns-markets-thirst-for-more.html

[5] IMF chief proposes new reserve currency: http://www.prisonplanet.com/imf-chief-proposes-new-reserve-currency.html

[6] Everyone’s Scratching Their Heads And Trying To Figure Out What The Heck Is Happening To World Markets: http://www.prisonplanet.com/everyones-scratching-their-heads-and-trying-to-figure-out-what-the-heck-is-happening-to-world-markets.html

[7] Medvedev Unveils “World Currency” Coin At G8: http://www.prisonplanet.com/medvedev-unveils-world-currency-coin-at-g8.html

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