Posted on 08/11/2015 11:29:32 AM PDT by tcrlaf
Real Americans don’t respond favorably to such threats.
He's not bluffing!
Here’s an essay on the downsides of reserve currency status:
http://blog.mpettis.com/2014/10/are-we-starting-to-see-why-its-really-the-exorbitant-burden/
That is why nobody else is in a hurry to for his country’s currency to assume the mantle, all rhetoric to the contrary. For instance, countries will use the Chinese yuan as a trade currency (i.e. to buy and sell goods and services), but not as a store of value (i.e. as a reserve currency) because at bottom, nobody trusts the Chinese. They repudiated huge amounts of infrastructure debt after the Communists took over in 1949, financing that was used to build roads, ports and railroads, which contributed to China’s post-civil war boom (i.e. in the same way a homeowner would benefit if he were able to get away with zeroing out his mortgage debt). Further, the Chinese system is characterized by political purges, discriminatory actions against foreign investors, and all manner of simply unfathomable economic measures. They are miles ahead of countries like India, Russia and so on, but then again, nobody talks about the Indian rupee or the Russian ruble as reserve currencies. Nobody interested in preserving the value of his assets wants to hold large amounts of Chinese yuan (or Indian rupee or Russian ruble) a microsecond longer than he has to.
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