Indiana’s place in a global currency

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China has renewed a call for the world to create a global currency.

If such a currency were to emerge, it would be a shot in the arm to Indiana’s manufacturing base, says Purdue University economist Kanda Naknoi.

China’s central bank is worried sick that massive government spending in the U.S. will spark a surge in inflation and shrink the value of more than $1 trillion in U.S. government securities it holds. China wants to insulate itself from a declining dollar by converting dollars to the new currency. It’s hoping the new currency would be less likely to fall than the dollar, thus preserving its piggy bank.

If the new currency took hold and the dollar fell, manufacturers would benefit because their exports would be less expensive to sell in other countries, Naknoi said.

How do you feel about a global currency? About the boom in domestic spending?

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