China Steps Up Bad Mouthing of U.S. Dollar; Target: The Yuan as World Reserve Curency

The poor U.S. dollar gets no respect. China is now stepping up its campaign against the dollar being the world's reserve system. With trillions or worthless dollars being printed in the last couple of years, they have their allies.

China's President Hu Jintao said that "the current international currency system is the product of the past,", in written answers to questions posed by The Wall Street Journal and the Washington Post.

We track all currency ETFs live. the Yuan is tracked by the very attractive CYB ETF.

"The monetary policy of the United States has a major impact on global liquidity and capital flows and therefore, the liquidity of the US dollar should be kept at a reasonable and stable level," Hu said.

Interestingly, Mr. Hu's comments come just ahead of his state visit to Washington on Wednesday
"Highlighting the dollar's importance to global trade, Hu implicitly criticized the Federal Reserve's recent decision to pump 600 billion dollars into the US economy, a move criticized as weakening the dollar at the expense of other countries' exports".

Asked about the exchange rate of the Yuan, and Chinese inflation, he answered:

"Changes in exchange rate are a result of multiple factors, including the balance of international payment and market supply and demand,"

"In this sense, inflation can hardly be the main factor in determining the exchange rate policy,"

Making the Yuan the World's Reserve Currency:

"China has made important contribution to the world economy in terms of total economic output and trade, and the RMB has played a role in the world economic development,"

"But making the RMB an international currency will be a fairly long process."

"They fit in well with market demand as evidenced by the rapidly expanding scale of these transactions,"