Posted on 04/21/2023 7:13:56 AM PDT by SeekAndFind
The share of Yuan is only 3.5% in global trade. The Currency was accepted by IMF as a Reserve currency considering its growing share in International trade in the year 2016, October 1 st. The progress is appreciable. However the contrast is against US$ that has about 60% market share. Here also it's share in Intl Trade is coming down. The reasons why the Yuan will not topple US$ dominance is simple apart from the current unquestionable lead..They are:
# China's economy is a mystery and conceals many things. What it reveals is that which the State decides in the matter.
# The Chinese economy and it's financial systems are not at all transparent. Its difficult to believe the correctness of their published data. Nations dealing with them cannot fully trust the Credibility and Transparency in dealings of Chinese banks.
# China's currency exchange rates are subject to intervention by the Central bank of China and does not follow a free float exchange mechanism in Currency trade.
# In China the Yuan is still a political tool of the CCP and hence subject to value manipulations. Whereas in the US the Dollar is an econo Himic unit with Free float exchange rate mechanism. It's value is highly Stable and is a much sought after global financial asset and forms a major part of all nations Foreign Currency Reserves. The Currency is very strong and so are the fundamentals of US economy. The US economy is highly stable and has the highest Gold reserves at around 8000 MT despite abolishing the Gold standards completely since 1971.
# The USA is an economic and political power with dominance in UN, World bank, IMF and a major partner in financial assistance to economically weaker nations in crisis.
# The US economy promises robust growth and is relatively safe with no border tensions. It's surrounded by sea on 2 sides with major Seaports and related merchandise movement.
# The US economy is self sufficient in fuel and power and the global interest in US financial assets make easy money available at US treasury for it's economic activity and growth at all tines.
#The tax collections in US are robust indeed at around $4 trillions every year. Systems are well administered in the matter. The free market systems encourage good economic avtivity in pursuit of profits and that gives more leverage for natural growth in strength of US$.
All these show the poor compentancy of China to pose any real threat to the dominance of US$. Not anytime soon.
Honestly, despite our major concerns and the non-stop money printing of our government, we should ask ourselves — WHAT IS THE ALTERNATIVE TO THE US DOLLAR as the world’s dominant currency?
There is no clear alternative to the dollar that can match its liquidity, depth, and credibility. The Euro, the Japanese Yen, and the Renminbi all face their own challenges and limitations in becoming global currencies.
Of course, the US Dollar’s status is not guaranteed. Several factors have contributed to the erosion of the dollar’s share of global reserves, trade, and payments, such as the rise of other economies, the diversification of reserve portfolios, the development of digital currencies and cryptocurrencies, and the use of U.S. sanctions.
However, none of these factors alone are likely to dethrone the dollar in the near future.
The dollar still enjoys several advantages that make it attractive as a store of value, a medium of exchange, and a unit of account for both official and private actors. These include the size and strength of the U.S. economy, the stability and openness of its institutions and markets, the availability and safety of dollar-denominated assets, and the network effects of widespread dollar usage.
Therefore, while the dollar’s dominance may decline gradually over time, it is unlikely to be replaced by another single currency anytime soon.
Premise hinges on whether dollar and US economy is not a heavily manipulated political value...
No - and people saying it can have absolutely no idea how global trade works.
Well, looking at history, there is no absolute certainty.
In the past, the countries with the leading global currencies were: Portugal (1450–1530), Spain (1530–1640), Netherlands (1640–1720), France (1720–1815), and Great Britain (1815–1920). So there is a precedent for major reserve currencies to come and go.
And as premises go, there is one major error when people use the word — RESERVE CURRENCY: the USD is not “the reserve currency.” It is “the major reserve currency.” Any currency can be held as a reserve currency.
There are no economic law about this and it’s up to each country to decide what they want to hold, of course. Nobody declared that the USD has to be the major global reserve currency, it’s just the result of individual decisions by each country.
As far as we know, the dollar only accounts for 63.5% of reserves, EUR is 20.4%, and then there are the rest. Take a look at the International Monetary Fund’s breakdown of reserves by currency at :
https://data.imf.org/?sk=E6A5F467-C14B-4AA8-9F6D-5A09EC4E62A4
NO. No one, except governments in highly political deals, wants to hold Chinese Yuan.
Chinese banks are state-run, finances are completely opaque, and they operate as political arms of the CCP. Moreover, China has strict capital controls and foreign-exchange rules.
The same reasons you would not trust the US Government with your money (and you shouldn’t) are multiplied several times over with China.
Having said that though, many other options to holding US dollars will arise, as the US Fed.gov resembles China more and more.
“The US economy is self sufficient in fuel and power”
ONLY when Democrats aren’t running the government.
For some reason, I see more people posting about the imminent crash of the dollar than I see in line at the bank cashing in all their dollars to buy yuan and rubles.
Yes, it will. The world’s leaders have been bought or threatened to make China the dominant power.
No alternative? Well the reason this is being discussed is because there is an alternative. You create a false dichotomy - the only alternative for a universal currency is the $$. But what if the problems with a universal currency are greater than the benefits.
And, there are lots of problems in large part becausethe US treats the $$ as a leash to bend other countries to its will rather than as a means of assuring economic and personal freedom. We have seen this through the control of SWIFT and sanctions and then the massive tax imposed upon the whole world to fund our spendthrift corrupt ways like printing money to dilute the world’s reserve currancy. Basically we are treating the rest of the world as our piggy bank. Talk about a universal global tax - we already have one with the US [deep state] as the beneficiary.
That is why there is growing resistance to the $$ as the sole universal reserve currency. If Argetina does what the US does it gets hyperinflation, collapse of its currency and intervention by the IMF and World Bank. That could be OUR future.
Quora is Chicom propaganda.
Their trolls have inundated it.
RE: The author is severely suffering a bad case of Normalcy Bias. He basically says that, because we’ve been so big and so good, the good times will never end.
I have to sadly agree with you here.
The U.S. dollar inspires less and less confidence. The fault lies with the mismanagement of the country. The American public debt is exploding, and many countries don’t want to pay forever for the standard of living of Americans.
In reality, the U.S. dollar offers an exorbitant privilege to Americans. It allows them to live on the backs of the rest of the world.
China or Russia have long been preparing for the fall of the US dollar by buying massive amounts of gold for years. China has just launched the e-RMB in order to benefit from the first-mover advantage to break the monopoly of the US dollar.
The crux of the war for Americans now is to make sure that oil remains priced in US dollars.
But, but, but, Several initiatives from China and Russia have emerged in recent years to ensure that OPEC countries no longer systematically favor the U.S. dollar.
For the time being, Saudi Arabia continues to support the U.S. dollar. Other OPEC countries are following suit, but Qatar has begun to give more room to the Chinese yuan.
This explains why Qatar has suffered such a boycott from surrounding countries for example.
Several initiatives from China and Russia have emerged in recent years to ensure that OPEC countries no longer systematically favor the U.S. dollar.
These are the major headwinds the US Dollar will be facing and the non-stop spending like drunken sailors by our government will simply ADD to those headwinds.
The main question is this — WHAT ARE THE BETTER ALTERNATIVES to the US Dollar?
I would agree atm, in some cases, we’re just really lucky there’s not a serious competitor to the US dollar. The whole world is embarrassing for the embrace of seriously anti-business ideologies.
So I am not overly worried about it.
RE: Quora is Chicom propaganda.
There are CCP trolls indeed, but let’s stick to the CONTENT of this particular article and discuss whether it is sound or otherwise.
Utterly unlike the US. Well we aren't communist. We are fascist where a few banks control US finances so its not the same - except it sort of is.
You are correct. The USA and, in turn, the dollar, are being systematically attacked and are crumbling.
Doubt the Chinese themselves will accept much yuan for their exports.
Note most importantly those saying it will replace the dollar are NOT exchanging their green backs for Chinese Communist Party fiat.
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