The madness continues as Michele Bachmann introduces legislation that “would bar the dollar from being replaced by any foreign currency.”
What the Chinese were proposing, of course, was to replace the dollar as the world’s reserve currency. I would take the view that a move away from near-exclusive reliance on the dollar is probably inevitable irrespective of what we do. But whether or not you agree with me about that, this isn’t something congress can ban—it’s a decision by foreign countries about what they do with their reserves.
In response to an inquiry from Greg Sargent, a Bachmann spokesperson clarifies that Bachmann understands she can’t legislate foreign countries’ behavior and that “This legislation would ensure that the U.S. dollar remain the currency of the United States.” But nobody — not Russia not China not Tim Geithner — has ever proposed changing this.