On March 11, I noticed an obscure reference buried in a Moscow Times story, mentioning the Kazakhstan president’s suggestion about a new international reserve currency to replace the dollar. I blogged about it, thinking that the suggestion was an outlier. It was Kazakhstan, right? Borat country. I thought I’d be branded a kook for mentioning it. Black helicopter stuff.
A strange thing happened. The very next day Robert Mundell endorsed Borat’s idea. And I blogged about that, thinking that the idea couldn’t really go anywhere.
Then the Kremlin announced on March 18 that the idea was one of their priorities for the G-20 summit. And I blogged about that. I admit that I was getting worried.
Then the Chinese Central Bank on March 23 announced their support for the idea.
It went from Borat to Mundell to the Kremlin to the Chinese Central Bank. See where this is going? Sure you can. From Ben Smith’s blog at the Politico:
[Timothy] Geithner, at the Council on Foreign Relations, said the U.S. is “open” to a headline-grabbing proposal by the governor of the China’s central bank, which was widely reported as being a call for a new global currency to replace the dollar, but which Geithner described as more modest and “evolutionary.”
“I haven’t read the governor’s proposal. He’s a very thoughtful, very careful distinguished central banker. I generally find him sensible on every issue,” Geithner said, saying that however his interpretation of the proposal was to increase the use of International Monetary Fund’s special drawing rights — shares in the body held by its members — not creating a new currency in the literal sense.
“We’re actually quite open to that suggestion – you should see it as rather evolutionary rather building on the current architecture rather than moving us to global monetary union,” he said. . . .
The continued use of the dollar as a reserve currency, he added, “depends..on how effective we are in the United States…at getting our fiscal system back to the point where people judge it as sustainable over time.”
Although Geithner later tried to amend his remarks and Hope ‘n Change rejected the idea last night, it’s not hard to see a pattern here.
Borat to Kremlin to China and now to . . . the Administration? In a mere two weeks? What the hell is going on here?
Are we back to black helicopters?
UPDATE: March 26, 5.45 am
Now another Administration official has weighed in. White House economic advisor Austan Goolsbee refused to rule it out when talking with Wolf Blitzer last night.
What the f@#k?
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