The Taipan Publishing Group’s editorial director, Justice Litle, sent around an article this morning with the subject line, “Uh-oh.”

And what I read was pretty scary. I’m posting it here with a link to the original article and invite your comments…

China wants dollar replaced as reserve currency
By Jamil Anderlini in Beijing

Published: March 23 2009 12:16 | Last updated: March 23 2009 14:22

China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.

The goal would be to create a reserve currency “that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies,” Zhou Xiaochuan, governor of the People’s Bank of China, said in an essay posted in Chinese and English on the central bank’s website.

Although Mr Zhou did not mention the US dollar, the essay gave a pointed critique of the current dollar-dominated monetary system.

“The outbreak of the [current] crisis and its spillover to the entire world reflected the inherent vulnerabilities and systemic risks in the existing international monetary system,” Mr Zhou wrote.

Read the full article here, and then come back and post some comments…

It’s time for another peek at our exclusive newsletter for Taipan Publishing Group subscribers, Taipan Insider.

I told you on Monday that the Chinalco-Rio Tinto deal was delayed for another 90 days. I think the deal will eventually go through, and that would mean another bump in share prices in the mining industry.

In the meantime, I wanted to share with you an article I wrote for Taipan Insider about China buying up assets and natural resources around the world. From March 5… Enjoy.

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Here’s the hitch…

In January and February, I told you about Rio Tinto’s (RTP:NYSE) search for cold, hard cash. I went into greater detail in the pages of Taipan Insider, our exclusive communique to Taipan Publishing Group’s subscribers.

I thought the most recent deal - the $19.5 billion deal that would give China’s state-owned aluminum company Chinalco, a 50% stake in RTP’s mining assets and $7.2 million in convertible bonds - was done and done.

Not so…

Australia announced it was extending its review of the Rio Tinto/Chinalco deal for a further 90 days.

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It’s one of the top stories on all the financial news sites:

China “worried” about US Treasury holdings - AP
China “worried” about safety of U.S. Treasuries - IHT
White House Seeks to Reassure China U.S. Debt Safe, Deficits Under Control - Bloomberg
China’s premier worried for U.S. investments

Most analysts estimate that China has $1 trillion invested in U.S. Treasuries and notes. That’s roughly half of its currency reserves… And if China decides to sell them - at least, if they sell them all at once - it could slash T-bill values.

That would ultimately slash creditor’s reserves, though, which would be a little like self-mutilation.

I’m not alone in thinking that the move away from T-bills will be more like blood-letting than amputation… And some emerging markets are actually still interested in buying U.S. Treasuries.

Russia, for instance. On March 4, 2009, Russia became the 5th largest U.S. creditor with a total of $116 billion in U.S. T-bills in its coffers.

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