The reserve status of the dollar is a lynchpin for the global economy, and any attempt to deviate from this understanding invites more instability, both of the political and financial types.
However, the below trial balloons are merely more mercantilist saber-rattlling. The world is not ready for a weak dollar.
Malaysia, China Consider Ending Use of Dollar for Trade
By SHAI OSTER BEIJING -- Malaysia's prime minister said China and his country are considering conducting their trade in Chinese yuan and Malaysian ringgit, joining a rising number of nations thinking of phasing out the dollar.
"We can consider whether we can use local currencies to facilitate trade financing between our two countries," Malaysian Prime Minister Najib Abdul Razak told reporters at a briefing Wednesday after meeting with China's premier, Wen Jiabao.
"What worries us is that the [U.S.] deficit is being financed by printing more money," Mr. Najib said. "That is what is happening. The Treasury in the United States is printing more notes."
China has been promoting the idea of replacing the dollar as the global currency, suggesting that a basket of currencies less linked to the fate of one economy would make more sense. It also has been talking about using the yuan for trade settlements, starting gradually in the region and then expanding farther abroad.
On Monday, U.S. Treasury Secretary Timothy Geithner urged China to move toward a more-flexible exchange rate for the yuan. If the yuan were to strengthen, that would increase China's domestic buying power and reduce the country's dependence on exports.