exorbitant privilege

China, Russia Want New Monetary System

The Director of China's Central Bank Xiao Chuan has presented a proposal for the adoption of new international reserve currency, one that would not be under the contral of any one nation, and which would be based on functions such as trade pricing and settlements which could be carried out separately from financing the credit needs and imbalances of any one nation, such as the United States. The proposal, which may be presented at the upcoming G-20 meeting in England, was featured on the Chinese Central Bank's website. This proposal may also be considered the answer to Bernanke's expansion of Fed Reserve credit facilities, and intention to buy $300 billion of US Treasury securities. Bernanke's move reduced the value of China's holding of US securities by 5% because of the fallin value of the dollar.