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The buck stops here - or does it?

Business Times - 27 Mar 2009

NEWS ANALYSIS
The buck stops here - or does it?

By LEON HADAR
IN WASHINGTON

AGAINST the backdrop of next week's G-20 summit in London, several emerging economies led by China and Russia have been promoting the idea of halting the use of the US dollar as the main global reserve currency and replacing it with a new one.

This could pose huge economic problems for the Obama administration which is planing to continue paying for the financial bailout and the economic stimulus by printing more dollars and by selling more Treasury bills to foreign private investors and central banks.

In China which is the largest holder of US dollar assets, with American greenbacks making up more than half of its US$2 trillion in foreign reserves, including US Treasury bonds worth about US$750 billion, there is concern over US deficits that could erode the greenback and the value of China's foreign reserves.

China's central bank governor, Zhou Xiaochuan raised the possib…