Can the yuan dethrone the US dollar as the world’s reserve currency?

[jhungary]

It is already happening. US government and economists don't worry for nothing.

lol, name me one economist that actually doing the worrying?

At least this guy wasn't worry. And the Economist have this article out just 3 days ago

America’s economic outperformance is a marvel to behold

But the country could still undercut its own success

www.economist.com

 

[kankan326]

US dollar is like Tesla cars in EV. China doesn't need to make Tesla bankrupt. Having BYD is enough. Now Tesla cars are much cheaper than the time when there is no BYD.

 

[jhungary]

US dollar is like Tesla cars in EV. China doesn't need to make Tesla bankrupt. Having BYD is enough. Now Tesla car is much cheaper than the time when there is no BYD.

We are not talking about bankrupting USD ie, USD share of world reserve is 0.

We are talking about dethroning USD, which is <50%.

 

[beijingwalker]

lol, name me one economist that actually doing the worrying?

At least this guy wasn't worry. And the Economist have this article out just 3 days ago

America’s economic outperformance is a marvel to behold

But the country could still undercut its own success

www.economist.com

Tell me why suddenly there appears so many such articles from channels all over the world, what happened?

 

[kankan326]

We are not talking about bankrupting USD ie, USD share of world reserve is 0.

We are talking about dethroning USD, which is <50%.

Making US government thinks again before using dollar as a wealth harvester or weapon is the main goal. USD is also a useful tool for China.

 

[jhungary]

Tell me why suddenly there appears so many such articles from channels all over the world, what happened?

What article??

The only article I saw, other than reporting the news are the 3 dude you refer to which 2 of them don't even have a degree.

The article I saw about this is like this one, and the following.

An economist explains why Saudi Arabia and China are looking to ditch the dollar in a new oil deal — and where Beijing could target next as it spreads yuan adoption

"A potential deal in yuan is a sign that the world is looking for some counterweight to the US dollar," said a Boston College economist.

markets.businessinsider.com

"While any deal would be symbolic, the Chinese are not alone in the search for a non-dollar reserve currency," Tomic told Insider. "Other countries' need for dollars exposes them to the US financial sector, and consequently gives the US political leverage."

The Chinese Yuan Will Never Replace the U.S. Dollar

The U.S. dollar isn't going anywhere.

intpolicydigest.org

It is a popular bit of wisdom that China is the up-and-coming superpower and that the United States is a nation in decline. While it is a popular saying, a cold and sober examination of the facts about China, the economic challenges that China faces, China’s lack of natural resources, as well as the aging demographics of China, casts a sobering picture for the future of China.

While many people rave about China’s economic growth, and businesses prostitute themselves to try and tap China’s internal market, very few pay attention to the massive amount of debt that is an impending disaster for the Chinese economy, and the danger that such a collapse could cause. Estimates of Chinese debt are to the order of $28 trillion. China’s debt to GDP ratio is 282 percent of GDP. It is thought that due to shadow lending, the percentage of debt may be even higher.

The Dollar Rules the Financial Universe. China Can’t Change That.

Fears of a rising petro-yuan are overblown, Marc Chandler writes.

www.barrons.com

China may be Saudi Arabia’s biggest customer, but there’s no sign that Saudi Arabia will price oil in yuan. It makes no sense on several levels, including that the Saudi riyal is pegged to the dollar. When the Federal Reserve changes interest rates, the Saudi Arabia Monetary Authority and several other Middle Eastern countries typically quickly match the move.

The Chinese yuan is simply not convertible. It isn’t a question of technology but policy. China’s foreign-exchange rate is closely managed and purposefully opaque. Its capital markets are developing but aren’t sufficiently transparent. Including the yuan in the International Monetary Fund Special Drawing Rights in 2015 was supposed to spark growth in yuan reserves, but as of the end of the third quarter of 2022, the yuan’s share of international reserves was about 2.75%. The yuan’s share of Swift transactions briefly rose above 3% early last year, but by February 2023, its share had slumped to about 2.2%.

 

[beijingwalker]

What article??

The only article I saw, other than reporting the news are the 3 dude you refer to which 2 of them don't even have a degree.

The article I saw about this is like this one, and the following.

An economist explains why Saudi Arabia and China are looking to ditch the dollar in a new oil deal — and where Beijing could target next as it spreads yuan adoption

"A potential deal in yuan is a sign that the world is looking for some counterweight to the US dollar," said a Boston College economist.

markets.businessinsider.com

The Chinese Yuan Will Never Replace the U.S. Dollar

The U.S. dollar isn't going anywhere.

intpolicydigest.org

The Dollar Rules the Financial Universe. China Can’t Change That.

Fears of a rising petro-yuan are overblown, Marc Chandler writes.

www.barrons.com

So many, can't list them all. Google and find out.

 

[jhungary]

Making US government thinks again before using dollar as a wealth harvester or weapon is the main goal. USD is also a useful tool for China.

Again, I don't undertstand why you guys think like that.

You want USD not to be dominate, but then you want to take advantage on this, quoting you, "useful" tool for China.

Do you think it would be a useful tool for China if US loses its dominant? Or as I said to @tower9 better yet, do you think the US government would actually let you enjoy that "useful tool" if China were able to kick US out of its dominance.

I mean, if I am the US government, I see no point at all to put USD out there if USD can no longer dictate monetary policy. If it was me, i wouldn't let you take advantage. You want to dethrone us dollar? Then you would need o pay the price and piper.

I mean, can you have the cake and eat it? What do you think?

So many, can't list them all. Google and find out.

So many article saying otherwise and I still manage to list 4 (not including the OP article) I am not asking much, just list 2, and quote the author background and where it said it was beginning?

 

[kankan326]

Again, I don't undertstand why you guys think like that.

You want USD not to be dominate, but then you want to take advantage on this, quoting you, "useful" tool for China.

Do you think it would be a useful tool for China if US loses its dominant? Or as I said to @tower9 better yet, do you think the US government would actually let you enjoy that "useful tool" if China were able to kick US out of its dominance.

I mean, if I am the US government, I see no point at all to put USD out there if USD can no longer dictate monetary policy. If it was me, i wouldn't let you take advantage. You want to dethrone us dollar? Then you would need o pay the price and piper.

I mean, can you have the cake and eat it? What do you think?


So many article saying otherwise and I still manage to list 4 (not including the OP article) I am not asking much, just list 2, and quote the author background and where it said it was beginning?

I didn't say US will not gian any profit from dollar being good tool even if dollar only has 40% share. US can still harvest huge profit from the 40% share. Of course US will not be able to do what it used to do with dollar hegemony.

 

[jhungary]

I didn't say US will not gian any profit from dollar being good tool even if only has 40% share. US can still harvest huge profit from the 40% share. Of course US will not be able to do what it used to do with dollar hegemony.

You think??

I can think of a few factor even at 40%, they can still continue with dollar hegemony, from making a deal with EU (or other country) to have it go back to 50+ to pulling it entirely from the world reserve.

At the end of the day, even with 40%, this is still a large number, unless you have an equal amount of number to counteract this, USD would still be calling the shot. I mean it may not be as damaging as it used to be at 60% but it would still be a dominant force until it was replaced. And this is what this article said, you can't replace it with anything else.

The power of USD did not simply stop when it reaches <50. Again, unless someone else is above 50. Otherwise, it would still be the same.

And that is discounting how world economy will be impacted if and when US dollar dropped 20% off their reserve, I mean, what you are suggesting to take over that 20%? They can't just lose 20% without it being replace with some other currency. Are you counting on the EU? Or are you counting China will pick up the 20% slack? Or even smaller economy like Saudi Arabia or Russia? That would almost certainly guarantee you would bankrupt EU or China economy with hyperinflation. you aren't talking about a bump of 20% on EU or Chinese currency need which in itself is a disaster to begin with, the 20% we are talking about is WORLD ECONOMY, would love to see anyone try that.

 

[nahtanbob]

How the world was multipolar before US became the sole superpower?

it is a gold based standard. nothing is stopping Pakistan's and China's of the world from adopting it

 

[R2D2]

The World needs to go back to Gold and Silver as currency. Paper currency does not represent real value. It is fake and imposed on the people in each country. Gold and Silver are the real currencies.

 

[Mista]

@Mista

Seems like this is something Mr Beijing don't want the world to know lol.

Well, I will repost this...

Chinese yuan becomes most traded foreign currency on the Moscow Exchange, surpasses the US dollar

Why Chinese don't work to strengthen their currency? They have the capability to do so, China is still afraid of any move that will be perceived by the west as "threatening". Maybe in few decades .... Now it's a dillema for China, China holds one third of the world total foreign reserves...

defence.pk

Most countries hold USD in reserves not just because it's the most traded currency, but also because the US has the most advance, liquid and deepest financial markets by far. There's a wide range of securities to invest in from treasuries to bonds to equities.

Even as a retail investor, I invariably venture into the US markets because they have the most vibrant and dynamic companies across a wide range of industries which offer good returns with track record. If you are a large hedge fund or SWF which handle billions to trillions, you basically can't avoid the US financial markets if you want to optimize your portfolio because only they have that deep pool of financial assets to absorb your capital, diversify the risks, and offer good returns.

If you are in charge of a SWF with $100bil fund, will you invest a large part of the funds in Chinese assets? If so, how are you going to allocate your capital in China notwithstanding their strict capital controls? Are you going to buy their properties, their largest asset class, which are illiquid and generate little yield? Or invest in their casino stock market, which is dominated by SOEs and where prices are not necessarily determined by the market? Why do you think their top private companies like Alibaba, Baidu, Tencent, Xiaomi etc are not listed in mainland China? Can their financial reporters freely report negative news about SOEs to inform investors without approval from some cadre or whatever official it is? Can Chinese investors freely access foreign news?

You see, it's not just economic reforms but also major legal and political reforms they have to carry out for foreign investors to participate in their markets. Transparency, reliability, rule of law are very important, and in these aspects they still have a long way to go. It's not just becoming the second largest or largest economy and the RMB will naturally become the preeminent reserve currency. In the first place I don't have to hold my reserves in your currency to trade with you, and similarly you don't have to hold your reserves in my currency to trade with me. That's why despite China as the largest trading country, the world only holds 2.88% of their reserve currency in RMB.

^This is coming from the chairman of GIC, which handles ~$700bil+ of AUM and is among the most active SWFs in the world.

Singapore’s GIC Says 60/40 Portfolio Starting to Restore Value

The traditional 60/40 portfolio -- alleged by some investors to be dead -- is regaining some of its luster as bonds start to offer more value, according to Singapore’s sovereign wealth fund GIC Pte.

www.bloomberg.com

https://www.businesstimes.com.sg/companies-markets/gic-most-active-state-owned-investor-fourth-year-running-report

 

[jhungary]

Well, I will repost this...

Chinese yuan becomes most traded foreign currency on the Moscow Exchange, surpasses the US dollar

Why Chinese don't work to strengthen their currency? They have the capability to do so, China is still afraid of any move that will be perceived by the west as "threatening". Maybe in few decades .... Now it's a dillema for China, China holds one third of the world total foreign reserves...

defence.pk

^This is coming from the chairman of GIC, which handles ~$700bil+ of AUM and is among the most active SWFs in the world.

View attachment 924958
View attachment 924959
View attachment 924957

Singapore’s GIC Says 60/40 Portfolio Starting to Restore Value

The traditional 60/40 portfolio -- alleged by some investors to be dead -- is regaining some of its luster as bonds start to offer more value, according to Singapore’s sovereign wealth fund GIC Pte.

www.bloomberg.com

https://www.businesstimes.com.sg/companies-markets/gic-most-active-state-owned-investor-fourth-year-running-report

But, but, but these country swtich to Yuan and USD is doomed.......

Well, meanwhile all of what had been said has been lost to these people...........

 

[Mista]

But, but, but these country swtich to Yuan and USD is doomed.......

Well, meanwhile all of what had been said has been lost to these people...........

Just let them be lol.