Weekend News 28 Mar- G20, China, & UberCurrency

Interesting week leading up to the G20 summit. China has lowered the boom in criticism of the west's economic policies and stimulus attempts. Furthermore, they have asserted their interest in an international reserve currency. The bluntness of their statements certainly would lead one to believe that in their view, the economic initiatives they have created are working. The Central Bank of China has blamed the financial crises on "complaceny"  and suggests that market forces lead to asset bubbles and subsequent busts. Central Bank Governor Zhou Xiaochuan stated that governments should consider giving central banks and other government entities the ability to use extraordinary means to act boldly without a lengthy approval process. 

Without a lot of editorializing on this, I would say that apparently they are unaware that we have no oversight of the money printing body in this US, the Federal Reserve; the Fed operates with impunity. Additionally, our Congress has run through trillions of dollars of money printing, bailouts, and stimulus with little or no review or debate in the various halls of Congress. Someone needs to send the Chinese a memo, and perhaps they need to cut down on the Red Bull consumption. Stimulus is a little different when you are a debtor nation like the US. Furthermore, I suspect their 20 million unemployed migrant factory workers might take issue with their centrally planned "brilliance"....

What is concerning is the fact that top policymakers in Beijing are becoming increasingly more concerned with China's exposure to dollar-denominated assets. Their concerns appear to be manifesting into hardline rhetoric with the apparent goal to create an international currency based on a bunch of paper currencies. Fiat money is fiat money. Period.

That said, it is critical for the US to reduce debt, redevelop our economy based on production of services and goods (instead of consumer spending), and go back to sound money. China is going to stop funding our debt creation and spending habits, and the results will not be pleasant. 

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