Governor Zhou's Proposals and Geithner's reaction - the World's Future Reserve Currency System

Zhou Xiaochuan, Governor of the People's Bank of China made concrete, long term proposals to reform the international monetary system. Timothy Geithner's reactions to Governor Zhou's proposals caused a big stir amidst market participants. One of the constraints that leaders have while writing and speaking in public is that issues with strong geo-political overtones, especially those that touch on or highlight international competition or conflict; need to be discussed indirectly. The purpose of my essay below is to present the implications of Governor Zhou's proposals in a slightly more transparent manner so that market participants can understand more clearly and draw the right conclusions to guide their decisions. At this link you can watch the full video of Geithner's remarks at the Council on Foreign Relations.