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Geithner Open to China Using Non-Dollar as Reserve; Dollar Plummets

WIRE: Geithner was initially asked at a Council on Foreign Relations event in New York about proposals from People’s Bank of China Governor Zhou Xiaochuan for a new international reserve currency. He said “as I understand his proposal, it’s a proposal designed to increase the use of the IMF’s special drawing rights. And we’re actually quite open to that…”

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Geithner Will Work With Congress For More Money If Needed, He Says

U.S. Treasury Secretary is currently speaking at a conference in Washington where is offering his first words since word of his $1 trillion toxic asset relief program was leaked over the weekend. Within the last 30 minutes, the 47-year-old has stated that the economic crisis won’t end until the market takes on more risk. Despite the lack of risk-appetite seen in markets, he does see “hope” in corporate finance.

Today, the S&P 500 surged 7.1%, advancing 20% over the last two-weeks. This, however, does not indicate that the economy has been revived. After all “one day does not make a plan,” Geithner noted. But should markets come crashing down and see the economy slip further, Geithner will be willing to work with Congress if additional money is needed.

“The world is watching us” to stabilize the system, he said. Interestingly, the European Central Bank President, Jean-Claude Trichet, seemed to express the opposite sentiment about his jurisdiction. In an interview with the Wall Street Journal yesterday, the central bank chief stated that Europe does not need a fiscal stimulus to save itself from the global recession. The statement came just days after ThyssenKrupp, Germany’s largest steel-maker, announced it would be laying off 3000 jobs, the first of such lay-offs among the major companies in the region.

– LG

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