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.
The Yuan is a joke! The Chinese are facing a currency crisis orders of magnitude greater the USA.
If the Dollar is dropped as the Global Reserve Currency - there will be no successor. There just won’t be a Global Reserve Currency. Trade will be multilateral bartering or paid for with Gold.
RE: Well the reason this is being discussed is because there is an alternative.
OK, I’m all ears. Tell us what the practical alternative is, or would be. As an investor, I am open to it, if it exists or will exist.
China is certainly a manufacturing powerhouse but it seems doubtful it could ever “rule the world” when it steals almost all innovative intellectual property from the USA.
America is full of millions of Chinese spies stealing our technology.
If they are going to take over the world, why can’t they create on a scale proving their world dominance?
No you’re not. Open I mean. You clearly have your mind made up.
They are creating worldwide, through subjugation of leaders and peoples. They are working their dominance surreptitiously and not explicitly like a military with international reach.
Why would a 10-times bankrupt nation have the reserve currency? It won’t.
“The same reasons you would not trust the US Government with your money (and you shouldn’t)”
I buy TBills all the time. By law treasury debt gets paid first before any other government obligations.
I don’t trust the government in anything else.
Add that we are the world’s third largest (population wise)
nation, we are resource rich, and if we were to rid our selves of Democrats, very free.
Dollar will survive. I’m not about to start using Chinese money. How long do you think Amazon would survive if they wanted payment in Yuan?
Dollar trade has already declined 8% worldwide in the past few years. It’s going to happen much faster now.
RE: No you’re not. Open I mean. You clearly have your mind made up.
You’ve done a vry good job of NOT ANSWERING MY QUESTION.
The population that is largely illiterate & ferally cleaning out Walmart shelves, now that shoplifting/stealing is legal?
“The fault lies with the mismanagement of the country.” — and the root of that fault is politicians buying votes. The vote-buying scale was small for a couple of centuries, but has exponentially exploded in recent years. Almost everything the US government does (and wastes money on) is to buy votes on a massive scale. No southern border? Import “D” votes. Forgive student debt? Vote buying. Reparations talk? Vote buying. Endless expansion of every government social program? Vote buying. Leftists love to yammer about “sustainable,” but this is utterly not sustainable. I would not attribute it to malfeasance or mismanagement. It is either 1) vote buying or 2) intentional and nefarious destruction of the USA by our enemies.
“The main question is this — WHAT ARE THE BETTER ALTERNATIVES to the US Dollar?” Today, none. But 20, 30 or 50 years down the road?
added note,
Chinese money goes by three different names.
Dollar is one name.
However, I wonder if you know if, or suspect that people are draining their bank accounts and purchasing physical gold, silver or other valuables with the proceeds?
RE: But 20, 30 or 50 years down the road?
I could forsee another currency called X ( let’s call it that for now ) based on a known commodity ( say, Gold ), that no central bank can manipulate that many countries in the world will adopt. Who will lead such an initiative, only time will tell.
Piling on debt and buying from the rest of the world always works out well in the end. It's a sure sign of a thriving economy.
You think we’ve got the rest of the world stuck into our $$ dominated financial system. The rest of the world is trying to invent a way to get themselves out of our jam/trap/swindle. I don’t know how it will work out. I just know I wouldn’t bet on the status quo when folks are desperately trying to invent a way out of it.
13 percent of the population is not half.
Y’all know who they are.
They will be left with food and commodity deserts.
The rest of us have guns and we won’t let them Fuk up
our lives.
Some would want the same country that built too many poorly built skyscrapers and allowed Covid to escape from the lab to dominate world currency. Gee, what could go wrong?
EVs will need lots of expensive metal.
That metal can be used to back a currency.
RE: I just know I wouldn’t bet on the status quo when folks are desperately trying to invent a way out of it.
Well, we are in agreement here... but here are the X factors:
1) Timeline — WHEN it will happen
2) Political — are you willing to bet that the status quo ( as you put it ) will remain as they are? What if by chance, the voters come to their sensesthat vote in a FISCALLY RESPONSIBLE President and Congress?
It depends on whether one is an optimist or a pessimist at heart.
3) Foreign Policy — Exactly WHAT kind of currency are most countries going to recognize as the dominant currency? Will it be an existing one? Or an artificially made up one? If artificial, then we’re back to the Euro problem — WHICH CENTRAL BANK ARE THESE COUNTRIES GOING TO RELY ON TO MANAGE THE SUPPLY OF THE CURRENCY?
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