China confers currency controversy

http://news.bbc.co.uk/2/hi/business/8120835.stm

The BBC article, describes a report from the People's Bank of China, which states that a "super-sovereign " currency change should occur.

The implications are that an international monetary fund dominated by a single currency , specifically the US dollar could not be regulated as much as required by the country of issue. Basically the report claims that the US dollar's weakness is the primary reason for the current economic crisis worldwide.

The chief of the Chinese central bank aroused worldwide attention last year when he claimed the US dollar could be replaced as the world's primary currency by the Special Drawing Right. The Special Drawing Right was created during the late 60s by the International Monetary Fund.

The logic for this move is that no country should have control over the world's reserve currency. The article quotes the PBOC as claiming a debt-based consumption model is unsustainable.

I tend to agree with the statement that debt-based consumption is an inteniable position. The US has $11.3 trillion in national debt. Paul Krugman, nobel prize winning economist, in his book "The Return of Depression Economics and the Crisis of 2008" has noted that consumer debt is equal to the US GDP. The last time this happened was a few years before the Great Depression. Dire predictions.

I read in the Norman Transcript on Thursday an article from the AP entitled something like "Fed sees end to recession". I apologize but I gave my copy away otherwise I'd get you the specific article.

The article was describing the recent move by the Federal Reserve to maintain interests rates. It also quoted several economists regarding the situation, and how much longer or deeper a recession could be. My first thought goes to Phil Gramm, former economic advisor to the McCain campaign, who was caught on video saying, "We've(US) become a nation of whiners."

My problem and why I bring this up, is the fact that people like Gramm are regarded as experts on this economy, when clearly in that statement they are out of touch, and have no idea what is going on.

I would recommend questioning everything that one hears about the economy. Read multiple diverse sources of information. Do not assume that the current capitalistic model of economics is the best in the world. A few hundred years ago, the feudal system was regarded as the best economic model ever invented.

What does this all mean? Is the recession over? Should a monetary fund be allowed to create and control a country-independent currency?

Recommended reading: Chomsky, Noam: Profits Over People. Paul Krugman in the New York Times, as well as his numerous books. Marx, Karl: Das Kapital.