Taunter Media

It seems Zhou Xiaochuan got Bernanke’s message loud and clear.  And decided to bring it right back:

Back to the 1940s, Keynes had already proposed to introduce an international currency unit named “Bancor”, based on the value of 30 representative commodities. Unfortunately, the proposal was not accepted. The collapse of the Bretton Woods system, which was based on the White approach, indicates that the Keynesian approach may be more farsighted.

Zhou doesn’t like the fact that everything is priced in dollars, and Helicopter Ben has decided to just print more until he can buy what he wants.  John Connally once told some European bankers that the dollar was “our currency but your problem.”  Zhou isn’t from Texas, but that’s what he is complaining about:

Issuing countries of reserve currencies are constantly confronted with the dilemma between achieving their domestic monetary policy goals and meeting other countries’ demand for reserve currencies. On the one hand the monetary authorities can not simply focus on domestic goals without carrying out their international responsibilities; on the other hand they cannot pursue different domestic and international objectives at the same time. They may either fail to adequately meet the demand of a growing global economy for liquidity as they tries to ease inflation pressures at home, or create excess liquidity in the global markets by overly stimulating domestic demand.

Yes.  And whenever there is conflict between domestic goals and international obligations, you can be certain which the US will value more.  We may screw over our people to favor Wall Street bankers, we may shuffle billions to oil producers (most of whom are not American but some of whom are), but we will never do something that does not have a domestic constituency.  Call it the last element of democracy that still controls…