Friday, March 27, 2009

Monetary Policy? I Just Changed Clocks To DST

"The Economist" says the Chinese plan for the world's reserve currency to be not the dollar but a synthetic currency called "Special Drawing Rights" probably won't be adopted immediately. Good thing, because it's going to take me a while to figure out what articles like this actually mean:

[The Chinese] plan could win support from other emerging economies with large reserves. However, it is unlikely to get off the ground in the near future. It would take years for the SDR to be widely accepted as a means of exchange and a store of value. The total amount of SDRs outstanding is equivalent to only $32 billion, or less than 2% of China’s foreign-exchange reserves, compared with $11 trillion of American Treasury bonds.

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