When will the renminbi overtake the dollar?

Discussion in 'Currencies' started by boneyard, Jan 6, 2011.

  1. boneyard

    boneyard Well-Known Member Silver Stacker

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    The thing that's missing right now is an acceptable alternative. There's really nothing out there in large enough scale to withstand massive capital flows, and as I have written before, the game is now one of judging the 'least worst' of these three major currencies.

    In what seems to be a 6-month cycle, the dollar and euro have been jockeying for the 'worst of the worst' title; markets focus on Greek woes for a few months, then turn their attention back to California and Obamanomics.

    With Bernanke's "100% certainty" and nonsensical economic numbers coming out of the America's Ministry of Truth (Newspeak: USMiniTruth), we seem to be back in a period where the markets are more concerned with Europe. I think that Japan will be called to the carpet before too long as well.

    Full story here.

    good reading.

    http://www.sovereignman.com/expat/when-will-the-renminbi-overtake-the-dollar/

    comments?
     
  2. Shaddam IV

    Shaddam IV Well-Known Member Silver Stacker

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    Yes, I wish we could all decouple from the US$ and let our currency find it's sustainable value.
     
  3. AGgressive Metal

    AGgressive Metal New Member

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    The Yuan cannot fill the void for a large number of reasons. No one trusts Chinese communist capital "markets" with their national savings for one - there is very little transparency and no real track record to look to. For all its foibles, at least people know the US gov't has maintained the same unit of account for over 200 years and has maintained a (relatively) free market for most of that time. Today its not looking quite as free or as prosperous, but not to get off track...

    More importantly, the Chinese are a creditor nation and as such, there is no Chinese debt for anyone to buy! If you can't buy debt with a currency and earn a return, then no one is going to hold it. Even though you could theoretically buy corporate debt denominated in Yuan to get a return, that is not a reliable or liquid enough market when compared to T-bills.

    I think the dollar is on the way out over the next 5 years as the world reserve currency, but the Yuan will not fill its shoes. More likely there will either be chaos or a multi-polar currency system with no single reserve (or a New World Order-style global currency, yikes!)
     
  4. Lord Dragon

    Lord Dragon Member

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    The Chinese have their currency pegged for a reason. If they let it find its own level it will be far higher than it currently is destroying their local manufacturing and then have it flow back out to western countries as they will be more able to compete.
     
  5. MelbBrad

    MelbBrad New Member

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    Simple question,without notice, from a naive stacker....

    What would be wrong with a global currency?
    Why is everyone (?) against it?

    Can someone kindly explain the benefits and pitfalls in adopting a global currency in 100 words or less?
     
  6. Ouch

    Ouch Active Member

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    Would you like a global world government? Same answer.
     
  7. Lord Dragon

    Lord Dragon Member

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    Take a look at the Euro. Its as close to a global currency as we have. One country going down takes everyone else with it.
     
  8. Shaddam IV

    Shaddam IV Well-Known Member Silver Stacker

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    It's not the global currency that's the problem, it's who controls it.
     
  9. AGgressive Metal

    AGgressive Metal New Member

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    If it is a fiat currency then A) it can be manipulated to the controlling party's benefit B) whoever issues it will have more power than most or even all sovereign governments C) who would decide which nations could borrow from the global central bank? D) who decides which banks can get good over-night rates E) some countries would be eaten by inflation while others were starved for cash because one interest rate does not fit all - this is the problem of the euro currently, in part

    Really I could go on forever because it would be dreadful in every way.

    HOWEVER, under the classical gold standard, gold was the international currency. But it did not require any kind of managing or issuing body or any global government - people just mutually agreed to use it and it could not be inflated or manipulated by any one party since it was a naturally limited, tangible, and elemental (non-forgable) commodity.
     
  10. thatguy

    thatguy Active Member

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    Who gets to print it and spend it first?

    Imagine helicopter Ben, but this time for the whole world... shudders :0
     
  11. systematic

    systematic Well-Known Member

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    I would prefer a global change in consciouness and a shift in attitude that would strike fear in the hearts of those prepared to manipulate and pervert whatever financial system we use and teach those thieving b**tards a lesson to keep their filthy hands to themselves.
     

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