"The discussion, which took place between the leaders of five emerging economies and the G8 industrialised nations, including Barack Obama, caused concern among western leaders.

"We should have a better system for reserve currency issuance and regulation, so that we can maintain relative stability of major reserve currencies exchange rates and promote a diversified and rational international reserve currency system,” said Mr Dai, according to the Chinese foreign ministry."

We are hearing more and more of this from the other big nations...the "One World Gov" is on the way right after America falls flat on its face because a dollar won't buy diddly.

I'm really starting to get tired of hearing this broken record! The Chinese are going to dump the dollar? How about cut the tom-foolery, and just do it. Lets put aside your pity semantics for one instant and back up your threats. I, like many on ATS, know that when the inevitable happens; it will spell disaster for the US. However, if the Chinese had any stones; they would just do what they say. I am under the conclusion that maybe the US is so tangled in the Chinese economy that it would be almost as bad for them as it would be for the United States?

There comes a time when you have to see the Chinese musings as just threats and petty bully tactics by a debt holder. The US should say enough is enough, and if you are going to do it (dump the dollar); then do it! Call it reverse psychology, but I think the Chinese will get the message!

[edit on 11-7-2009 by Jakes51]

Yeah well...

they have been calling for a new reserve currencies for years not months. They and Russia and a few other countries. They floated the idea several times. It went over like a fart in Church, now they are back peddling. Of course they want to protect their investment in the US.

I agree someday there should be a new reserve currency. When that happens it will be a hit to American prestige but in the long run it would do wonders for our economy.

I think the only way in which the dollar would be replaced as the world's reserve currency would be through some sort of catastrophe. There was global financial meltdown in October and there are currently only discussions with regards to this issue. Although China has recently hedged themselves against a dollar collapse (we owe them 2 trillion dollars) through the purchase of precious metals, I do not believe there will be any significant change in their mindset unless there is an even bigger crisis. IMO this may come within 10 years if we have no intentions of reducing debt, changing our fiscal policy, or increasing GDP. If Obama continues with this ridiculous spending throughout his presidency, we may see collapse in 5 years. The GDP/debt ratio is presently valued at around 70%. Once the GDP to debt ratio reaches 100%, bond rating agencies degrade bonds from their status of AAA, which is considered to be the safest investment possible. That may signal giant meltdown for the US economy.