There are rumblings in the distance about a new international currency system.
The Wall Street Journal: China Takes Aim at Dollar
Apparently, the IMF is pretty much okay with this idea.
Quite frankly, the idea is entirely pointless from an economics perspective.
China is essentially suggesting replacing a fiat currency controlled by a central bank with a fiat currency controlled by an even-more-central bank. For obvious reasons, this isn't going to help anything. It's as if, say, there was some really unsafe type of car made by Toyota and then Audi came along and said, "Hey, users of the hypothetical unsafe Toyota car, I have a better plan! Let's make the same car, except we'll make it in a special international factory. Also, we'll import the raw materials from all over the world instead of just from Japan!" In my fictional world, Japanese car makers use only Japanese raw materials. This isn't the point.
If I just keep my economics hat on, there is no point. The whole thing is a giant "who cares?" So let me put on my politician hat.
This is more or less an attack one of the bases of the US's international power. The US is looking economically vulnerable for the first time in a while, so this shouldn't be too surprising. Also, China has realized that being tied closely with the US economically might not be the best idea in the long term. China has a vast amount of dollars and US bonds, and as such a vested interest in preserving the value of the dollar. An attack on the dollar as a reserve currency is a signal that China is afraid of being dragged down with the US should the dollar collapse. Essentially they're hoping to cut their losses, and increase their influence in world affairs.
Now let me put on my liberty hat for a second. It does, in fact, have three corners. In case you were curious.
This is bad news. If we thought we had problems with an opaque central bank totally unresponsive to citizens and beholden to private interests before...ho boy, we're in for a surprise. Why do we even still have an IMF, come to think of it? The organization was created to help maintain constant exchange rates under the Bretton Woods system, which hasn't been around since the early '70s. Hooray for international organizations surviving the death of the systems that required them to operate and just doing whatever they feel like! Most of the world uses floating exchange rates now. Is it unfair for one country to control the worlds single most important reserve currency? Probably. But the thing is, we should be getting rid of the central bank, not adding another layer of bureaucracy on top of it. What is it even going to do? Be the lender of last-er resort? And when this new international fiat currency collapses, should we start a galactic central bank to be the lender of last-er-er resort? It can print magical galactabux backed by the vapor of a comet's tail. All our problems will be over!
Also, don't we already have this? Someone explain to me the difference between SDRs and what China is asking for.
I think I have it figured out. The IMF is the head zombie of the zombie banks. As you know, high-level undead can control lesser undead through psychic dominaton. Zombie banks are just like real zombies: shambling mockeries of their former selves, a pestilence upon the landscape. Except instead of eating brains, zombie banks eat taxpayer money. A zombie bank capable of producing currency would have an endless supply of food and therefore be unstoppable. By creating an international fiat currency, China is hoping to unleash an undead menace that will ravage the world, leaving it a dead, barren wasteland. Stock up on shotgun ammo and bury your canned goods. Zombie Armageddon is here.