VCheng
ELITE MEMBER
- Joined
- Sep 29, 2010
- Messages
- 48,460
- Reaction score
- 57
- Country
- Location
Lets wait and see shall we
"Dream in a pragmatic way." - Aldous Huxley
Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature may not be available in some browsers.
Lets wait and see shall we
Today, more than 60 percent of all foreign currency reserves in the world are in U.S. dollars. But there are big changes on the horizon. The mainstream media in the United States has been strangely silent about this, but some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade.
For a credit-based fiat currency to become global it has to circulate outside its home territory. How does that happen? By selling currency-denominated debt which can then be used to purchase goods and services. That's how it worked for the pound and franc; that's how it works for the dollar. The Euro has failed to become a global currency because comparatively little of its Euro-denominated debt has sold outside the Euro-zone, and with the Greek crisis much of that is being repatriated.
China is starting to issue renminbi-denominated debt and that's a step forward, but its currency isn't fully convertible and that will hamper things. The Chinese should be a bit more confident in themselves and realize that the "normal" state of things, historically, is that China has been the world's biggest economy and thus it shouldn't fear the renminbi becoming a world currency.
The U.S. has enjoyed the advantages and suffered the disadvantages of seignorage for decades now. I won't be especially sorry to see the dollar's reign diminished; our politicians will be compelled to make our budgets balance once more, or else debt will be owned more by Americans themselves which should result in greater efficiencies and we'll see manufacturing grow once more.
For a credit-based fiat currency to become global it has to circulate outside its home territory. How does that happen? By selling currency-denominated debt which can then be used to purchase goods and services. That's how it worked for the pound and franc; that's how it works for the dollar. The Euro has failed to become a global currency because comparatively little of its Euro-denominated debt has sold outside the Euro-zone, and with the Greek crisis much of that is being repatriated.
China is starting to issue renminbi-denominated debt and that's a step forward, but its currency isn't fully convertible and that will hamper things. The Chinese should be a bit more confident in themselves and realize that the "normal" state of things, historically, is that China has been the world's biggest economy and thus it shouldn't fear the renminbi becoming a world currency.
The U.S. has enjoyed the advantages and suffered the disadvantages of seignorage for decades now. I won't be especially sorry to see the dollar's reign diminished; our politicians will be compelled to make our budgets balance once more, or else debt will be owned more by Americans themselves which should result in greater efficiencies and we'll see manufacturing grow once more.
Scary, isn't it?I agree with a lot of what you say. I feel compelled to tell you as it don't happen often
Scary, isn't it?
Solomon I think its easier behind a keyboard to accentuate differences. I sometimes wish I could have a cup odd tea/coffee with those that we disagree with and there might be more common ground than either of us want lol
yes, I'd really like to see you say some of your comments. it would be hard to keep a straight face with some of the jokes you crack.
contrary to what you think mate I have lots of Indians as friends. I even had a chat with Yetti on the phone (good humored and funny). Believe you me a lot of what I say is tongue in cheek and in response to provocation by your countrymen
contrary to what you think mate I have lots of Indians as friends. I even had a chat with Yetti on the phone (good humored and funny). Believe you me a lot of what I say is tongue in cheek and in response to provocation by your countrymen
no issues here, i do find your posts funny
makes the day go quicker
china will one day end the reign of the american dollar.
how long that will take i dont know.
china will have to have a pretty powerful military before it unseats the dollar because americans wont be going down without an almighty fight.