18 March, 2011

Dollar troubles

From The Telegraph:

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 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.

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.
Ambrose-Pritchard tends to raise alarms, even when unwarranted.  It seems like an odd thing for the Treasury Secretary to say (admit), though.  An unexpected attack of honesty?

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