Sorry to have burst the naivete bubble early, but it didn't take China outwardly denouncing the U.S. currency as the world's reserve currency to figure out that China is concerned about their investment in U.S. Treasurys.
Tim Geithner was pouring gas on the fire with his unncecessary and obvious public statement about China manipulating their currency.
I really don't know why China is crying to the IMF about it when they could single-handedly shut down the U.S. currency as the reserve currency by ceasing to buy Treasurys or by selling them. China has such a massive investment that they are stuck in a paradox with their investment, the same as a creditor that has sunk a large investment into a dying business. The creditor knows the business is dying but doesn’t want to be the one to kill it. The U.S. is like a dying business that has creditors but also has a counterfeit money printer and prints out money when it doesn't have enough money to pay its debts. But if it prints too much it will become obvious to the creditor that the money isn't real.
I wonder when the public will stop focusing on smaller infractions like the AIG bonuses and take a closer look at China's ongoing rhetoric about our currency. The accepted lie about the U.S. currency is that a devalued dollar is a good thing. Let's take a look at what happened when we had $150 oil which was amazing for our economy. It helped to drive our economy right down to where it is now. It was also coupled with the bursting of the debt and housing bubbles that were the drivers of our shadow economy.
Everything that seems so obvious now was obvious then, too, but no one wanted to listen because of the other static like the war in Iraq. It was clear and indicators like average household salaries did not go up but yet their mortgage obligations and spending did. This is just like a cash flow statement. Where did the money come from? Debt - of course.