Mr. Dai did not say “reserve currency,” he said “reserve

currencies.”… with an “s” and he made it quite clear

that what he had said was from a prepared text that

was rather obviously written in Beijing with the

approval and concurrence of the highest authorities

there. It appears that Mr. Dai’s comments were to have

been given by President Hu himself, but Hu had gone

back to Beijing to take care of the worsening situation

in Xinjiang, and so the statement was left to Mr. Dai. In

other words, this is China’s position, and it is not to be

misunderstood.

Interestingly, after Mr. Dai had spoken, French

President Sarkozy joined the debate saying that

France supports a multi-currency reserve system. He

minced no words when he said that the discussions

regarding the reserve currency are of course complex

but that these

It is a reasonable statement made by a friend, not an

enemy of the US. For that reason we give Mr.

Sarkozy’s statement a good deal more credence than

we might otherwise. Had Mr. Medvedev or Mr. Putin for

example have made that statement we might have cast

it aside and paid it little if any heed. But Mr. Sarkozy

made it, and for that reason attention must be paid.

The pendulum is swinging against the US dollar we

fear, military power notwithstanding.