"The U.S dollar has ceased to be trustworthy..."

That quote is from an opinion piece in the People's Daily Online, English Edition, of the Chinese main media voice, Asia and Europe join hands to tackle challenges. Other excerpts follow:

Currently, the exacerbating global financial crisis has plunged the entire world into a wretched plight, where assorted global issues, such as energy problems, climate change and food safety are interwoven, and unprecedented challenges are confronting the international community.

the U.S-born credit crunch set up a new round of world-wide financial crisis. It is evident that only a joint effort from Asian and European countries and the international community as a whole can succeed in overcoming current difficulties, maintaining the stability of the international financial market and promoting sound development of the global economy.

The EU summit concluded on Oct.16 strongly advocated that a new Bretton Woods system should be put in place in a bid to fortify the monitoring mechanism over the international financial market

Currently, almost all the countries from across the world have to take toll and risks for the simmering financial crisis induced by the U.S sub-prime mortgage crisis, while the U.S, the trouble maker, is tucked away under the protective umbrella, and well shielded by its fat interests. People woke up from the general panic to realize that the U.S is, by taking advantage of its dollar hegemony, grabbing the global wealth, and the U.S dollar has ceased to be trustworthy as before. Therefore, the dollar-pegged payments in the international trade transactions must be shattered, and a more democratic and legal international monetary institution is on the point of coming out at the global call.

China is also known for its largest foreign exchange reserves and fastest economic growth. Back in case of the U.S-born financial storm, China is acting as the largest creditor to the U.S and also the victim to bear the brunt of the attack.

Also note this Reuters story on what looks to be the same topic.

China has also taken a bit of a slighted whack at the Europeans, with whom they this weekend concluded a financial crisis confab.

First, the whack, from Xinhua news:

Europe has become a big victim in the financial crisis, which originated in the United States. As European banks are still struggling with tight credit triggered by the U.S. sub-prime mortgage defaults, Europe learned it can hardly be separated from the United States.

Due to the close trans Atlantic financial ties, any problems in the U.S. financial market may soon spread to Europe. In some cases like the current financial crisis, Europe was even under a risk of paying more than the United States since it is difficult for the EU, composed of 27 individual countries, to react as quickly as Washington.

That is why when the Bush administration put forward a 700- billion-dollar rescue package shortly after the outbreak of the latest financial storm, each EU member state was fighting on its own. Their fragmented response had been a source of concern for the stumbling markets.

Fortunately, EU countries finally got untied at their autumn summit last week, adopting the same toolbox of measures to deal with the crisis, which was largely modeled after the British rescue package designed by British Prime Minister Gordon Brown.

EU leaders apparently blamed the financial crisis on the failure of free-market capitalism in the United States.

"The financial crisis is not the crisis of capitalism. It is the crisis of a system that has distanced itself from the most fundamental values of capitalism, which betrayed the spirit of capitalism," Sarkozy said in a recent speech.

"We must reform capitalism so that the most efficient system ever created does not destroy its own foundations," he said on Saturday in a speech when he visited Canada.

And now, one of the key points of agreement to come out of the weekend Euro-China summit, ASEN:

5. Leaders were of the view that to resolve the financial crisis it is imperative to handle properly the relationship between financial innovation and regulation and to maintain sound macroeconomic policy. They recognized the need to improve the supervision and regulation of all financial actors, in particular their accountability.

If the Bush Doctrine had been one of pre-emptive regulation rather than pre-emptive shadow-boxing, we wouldn't be in this situation.

But as it is now, the world leaders had better be very wary of using "regulation" responsibly and not as some disguised weapon of protectionism. From most accounts, the Great Depression was as deep and contagious as it was because of nationalistically competitive protectionism. So far, all the right words are being spoken; let's just be aware of what the actions turn out to be.



This topic continues in Mulling that whine about the untrustworthy dollar