Upset over U.S. fiscal crisis, China urges a ‘de-Americanized world’

from The Gray Area:

The issue in this LA Times article is the big threat. The dollar as the Reserve Currency of the world is all that keeps our country from a complete collapse. The ability to print more money anytime we want to or need to is what keeps us viable as a country. Without the dollar as the Reserve Currency, the weight of our National debt will crush our economy and our people.

Upset that the fiscal stalemate in Washington is threatening the global economy, China called for the U.S. dollar to be replaced as the international reserve currency as well as for broader steps to create a “de-Americanized world.”

China also called for an end to the “pernicious impasse” in the U.S. over the raising the debt limit and ending the partial government shutdown, saying the world needed another reserve currency so nations could protect themselves “from the spillover of the intensifying domestic political turmoil in the United States.”

Most countries hold their foreign exchange reserves in U.S. dollars because the currency is viewed as the world’s most stable. China is the largest foreign holder of U.S. debt, with about $1.3 trillion in Treasury bonds, and is concerned about the impact of a U.S. failure to raise the debt limit on those holdings.

With Washington politicians still far from a deal as the Thursday deadline for raising the $16.7-trillion debt limit looms, China’s official state-run news agency published a sharply worded editorial Sunday criticizing U.S. leadership.

“As U.S. politicians of both political parties are still shuffling back and forth between the White House and the Capitol Hill without striking a viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanized world,” the Xinhua news agency said in an English-language commentary.

China’s concerns echo those of economic officials around the world about the effects of a failure to raise the U.S. debt limit, which could trigger the federal government’s first-ever widespread default.

Christine Lagarde, head of the International Monetary Fund, told NBC’s “Meet the Press” on Sunday that global finance ministers are worried the uncertainty surrounding a U.S. default “would mean massive disruption the world over, and we would be at risk of tipping yet again into a recession.”

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