“China called Sunday for reform of the global currency system, dominated by the dollar, which it said is the root cause of the global financial crisis. ”
understanding the current monetary system is important – until Nixon closed the gold window in 1971, international trade had gold as a foundation – Nixon’s action was a big “F You” to the rest of the world – they didn’t like it but they went along with it because of America’s economic and military dominance
the floating exchange rate system that most of us are familiar with rose up out of the vacuum created by Nixon’s action and it has gotten us to where we are today
my point is that the US screwed the world over in 1971 and the world wasn’t happy about it but had few choices other than to go along – now, the US is trying to monetize trillions of dollars worth of debt which is likely to significantly devalue, if not destroy, the US dollar – the world has more choices today than they did in the past and China is taking advantage of those choices
