The dangers of Mark Carney’s reserve currency musings…

Carney is putting Canada in a bad position with this move.

I still think that Mark Carney’s call for dropping the U.S. dollar as the global reserve currency is a sleeper issue.

I’ve written about that issue here for the Toronto Sun, talked about it on radio, TV and various videos. It hasn’t gotten the attention that it deserves in the media, but you can bet the Trump administration has noticed the comments.

Here’s part of what Carney said in his recent interview with the New York Times.

Would the global system be in a better position if we had — I’ve long thought this — diversification of reserve currencies? The answer is yes. That would provide more flexibility. If I were the reserve currency, I would want to keep that position for as long as possible, and so I understand the U.S. position there. But, the U.S. wants a weaker dollar, imbalances adjustment and to retain full reserve currency. And ultimately, our view may be wrong about this, but history tells you and logic tells you that rebalancing — yes, it’s partly structural policy in China — but it’s also going to be monetary reform, and that is going to shift reserve currency composition.

The reason this is a problem for Carney is that this is an issue sure to upset both sides of the aisle in Washington. Keeping the Greenback as the global reserve currency is supported by Democrats and Republicans.

The U.S. dollar as global reserve currency is opposed by China, Russia, Iran and the like.

Carney just put us on the side of that rogues gallery.

One of the people who noticed the comments and has concerns on what it means for Canada is Dennis Molinaro, author of Under Assault: Interference and Espionage in China’s Secret War Against Canada.

Molinaro is also Assistant Professor in Security Studies and International Affairs at Embry Riddle Aeronautical University in Daytona Beach, Florida.

We chatted about Carney’s move and other threats emanating from China.

I hope you like it.