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Pariah wrote:

There is a huge barrier to China's currency becoming useful as a trade currency, they would have to let it float, which I do not think they would be willing to do.

That's not what they want. Quite the opposite, actually: the replacement to the dollar will be a unit of trade based on a "basket" of currencies. Strictly speaking, it's not really a currency per se. It's sort of a "virtual currency" to be used for trade. It won't be physical, with banknotes and coins.

When you think about it, it's quite remarkable and smart. No one country will dominate economically, and no one country's problems will undermine the "currency."

It's worth noting that the alleged plan to dump the dollar foresees a timetable of many, many years.

jerwin wrote:

Debunking the Dumping-the-Dollar Conspiracy

Even if all oil were sold for dollars, it would be a very small factor in the international demand for dollars, as can be seen with a bit of simple arithmetic. World oil production is a bit under 90 million barrels a day. If two-thirds of this oil is sold across national borders, then it implies a daily oil trade of 60 million barrels. If all of this oil is sold in dollars, then it means that oil consumers would have to collectively hold $4.2 billion to cover their daily oil tab.

By comparison, China alone holds more than $1 trillion in currency reserves, more than 200 times the transaction demand for oil. In other words, if China reduced its holdings of dollars by just 0.5 percent, it would have more impact on the demand for dollars than if all oil exporters suddenly stopped accepting dollars for their oil.

It's not just oil. It's the world trading currency, ships that cross the oceans use dollars for trade for example.
At 1 point the ships where not moving, since there where not enough dollars.
Also guess why other world banks/system banks got their interest rates also that low, since the FED can pump dollars in the system and trade them in for other currencies, cheap.

Last edited by Proost (2009-10-08 7:40 pm)