Bank of China hobbling away from US dollar

The governor of the People’s Bank of China, Zhou Xiaochuan, proposes that the SDR (Special Drawing Right) — the International Monetary Fund’s imaginary currency — becomes the new international reserve currency. He never says explicitly that he wants to move away from the US dollar but the implication is obvious:

A super-sovereign reserve currency not only eliminates the risks inherent in a credit-based currency such as the dollar — in contrast to one backed by gold — but also makes it possible to manage global liquidity, Zhou argued.

I find this laughable. First of all, he expects one political entity (the IMF) to print money more responsibly than an other political entity (the Fed) would. The intention is to avoid crises, so he says. Like most socialists, his reflex is to change the political control. Second, if this suggestion actually has any merit then, it can happen right away: the Chinese can start trading in the Special Drawing Right tomorrow.

Regardless, I do not believe the Chinese are interested in avoiding crises. They are just interested in preserving the value of their assets and to a degree, they are understanding that the printing money can destroy the value of assets. My suspicion is that they probably understand it better than most American politicians.