The way I see it, the yuan-dollar link became much more tenuous once the governments of China and Australia announced a few weeks ago that they would conduct their trade directly rather than use the U.S. dollar as a medium of exchange. This basically means that for those transactions between China and Australia, there is no bearing on the value of the U.S. dollar anymore.
Sorry, I didn’t intend to not reply, must’ve gotten several at once on the same thread.
I have mixed emotions on this. Debauching the currency is in a sense enabled by reserve status but losing such status or even beginning to move away from it will start bringing the consequences of that debauchery home, which means pain for Americans.
China trade policy in tandem with a formal yuan peg was a deal with the devil, but that’s water under the bridge now. An actual floating exchange rate (not that there is, not yet at least) will mean onshoring to the extent that it’s possible, which will benefit me personally. But, it will also bring pain in the form of higher cost of goods, which will be repatriating the inflation we’ve exported.
Continuing efforts at wage suppression on other fronts, primarily immigration policy both formal and (ahem) informal, will mean that wage growth will not keep pace with the imported cost push, so Americans on the whole will be getting poorer. More pain.
Somebody needs to show me the long term strategic benefit from ever having entered into this trade arrangement, because I see dependence upon a very large and still hostile nation that has been industrialized at our expense, masked domestic inflation that has enabled government profligacy even greater than before, and a decimated working class becoming entirely too accustomed to government assistance.
What have the American people as a whole gotten in exchange? What sort of consideration for this international largesse has there been?