jhungary
MILITARY PROFESSIONAL
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Venezuela? Zimbabwe? Or even we can go back to 1940s of KMT. You cannot compare China to compare with those in this sense because they don't have large trade surplus and foreign currency reserves
You do know Venezuela have a strong oil reserve, right? In fact, I think Venezuela Oil reserve worth a lot more than Chinese Forex Reserve. The reason Venezuela fail is not because they don't have anything to back up, the fail because they don't have a good control of monetary policy and there are no way they can get enough of "guarantee" back to the creditor.
It's the same with China, I don't know how you see it, but here in the west, we saw Chinese Currency as a weak based currency, without much monetary control. That belief was reinforced by Chinese Devalue its currency in 2015 about 9 months ago. You can say whatever you want as a Chinese point of view, but you are not talking about how Chinese is confident to their own currency, it's the world view.
Chinese currency is not exactly that strong? Japan yen is not that strong either. Many country using Yen in trade also have make USD as a guarantor.
I am not talking about Yen now, I was talking about Yen in the 80s, back then it was equal to Euro.
Again the credit of Japanese yen or Chinese yuan to international society is based on their tremendous manufacturing capability, large trade surplus, and huge foreign currency reserves. BTW when US started printing money (QE) after crisis in 2008, the dollar index actually started to increase.
Again, that is because QE is not exactly lending without limits. You keep using QE as an example that does not represent the situation, a fact that even you admit 2 post ago, I don't know why you keep using QE as an example? Can China use QE to deal with any financial problem? Maybe, I don't know, But That does not mean China can lend their currency without limit. QE or not does not answer this question.