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

[jhungary]

It’s not going to be one currency but many. Basically the USD is going to lose its privileged place. Washington won’t even be able to handle a decline of 20% usage let alone a massive drop like say a 50% decline because the US govt is wholly incompetent in managing a balanced budget and inflation will likely spiral out of control.

Again, even if you have 10 currency, as long as US is still largely ahead, it would not be able to damage the leads. We already have 10 currencies in the basket, ever wonder why US still dominate?

And as I explained, even dropping 20% at 39%, they still carry weigth unless some other currency reach 51% because that would still hurt the world economy if US is holding 39% of world currency and China having 10, EU have 20 and the rest of the world is having 5.

You still need a outright leader in the currency world to negate the advantage the US is having, and then you want the other countries to do the dirty work for China, which beg the question, what is in it for them too?

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

No, the world (in currency, not political power) is not multi-polar, it was based on gold standard.

And you still have not answer the question.

 

[Leishangthem]

There is no point in dethroning dollar,the goal is to dismantle doller hegemony and its perks enjoyed by the US,not to turn yuan into global reserve currency.

 

[tower9]

Again, even if you have 10 currency, as long as US is still largely ahead, it would not be able to damage the leads. We already have 10 currencies in the basket, ever wonder why US still dominate?

And as I explained, even dropping 20% at 39%, they still carry weigth unless some other currency reach 51% because that would still hurt the world economy if US is holding 39% of world currency and China having 10, EU have 20 and the rest of the world is having 5.

You still need a outright leader in the currency world to negate the advantage the US is having, and then you want the other countries to do the dirty work for China, which beg the question, what is in it for them too?


No, the world (in currency, not political power) is not multi-polar, it was based on gold standard.

And you still have not answer the question.

You don’t even understand what I’m talking about.

There is no point in dethroning dollar,the goal is to dismantle doller hegemony and its perks enjoyed by the US,not to turn yuan into global reserve currency.

Exactly

 

[ZeEa5KPul]

Sure, everyone like to put money in bank who would regulate your money anytime they like, I am pretty sure of that. LOL

You talk like you didn't steal all of Russia's money. Your charge is China might steal someone's money - well, the US regularly steals other countries' money.

 

[jhungary]

You don’t even understand what I’m talking about.


Exactly

I undetstand what you are talking about, you want the world to use a equal amount of currency.

set aside what that economic impact would be overnight for the USD to drop 20%, how are you going to work if you don't have a single dominant currency to achieve all that you said you wanted.

If the field are even, even dropping 20%, which will not just bring down US economy, this will bring down the world economy, let set this aside for a moment, what good does it do if USD is at 39% and the rest of the world are at 8-10%? That is before US can enter into a deal with EU, Japan, Australia to have it go back to 50% dominant. Even if they were equal shared.

Even with Chinese able to pump to 30%, USD will still have power because you cannot replace it outright, which mean 39% of the world reserve would still depends on USD, how are China going to "Win" in this scenario? In this scenario, EVERYBODY lose. Lol, if USD is losing its dominant and cannot dictate monetary policy, then exactly why you want to use USD to trade, or better yet, exactly why US would allow the world to trade USD at all if this is the case?

You and my dude Beijing have some sort of fantasy thinking "Hey I want to weaken USD to a point where they can't dictate international monetary policy, but then I still want to use USD to trade internationally......"

There are no way to avoid a disaster in a global scale unless some other currency is over 51% and take that hold, or we are go down in some sort of economic abyss and money is no longer important for world trade, otherwise at whatever percentage, USD would still have its power, again, unless it was being replaced.

 

[sutton999]

reduced dollar as reserve currency -> less treasure bond sale to other countries -> still print dollar to match budget -> inflation -> hype inflation or reduce budget

-> civil unrest

the process will be rather slow grind, as China and whole world had trillions of dollars as reserve, don't want dollar lose value too quick, controlled demolition.

 

[jhungary]

You talk like you didn't steal all of Russia's money. Your charge is China might steal someone's money - well, the US regularly steals other countries' money.

Well, I still remember my Chinese bank account have halved the money overnight in 2015

Why China is devaluing the yuan

China says it is a one-off move, but BBC Asia Business Correspondent Karishma Vaswani says there are several other reasons behind China's devaluation of the yuan.

www.bbc.com

 

[PakFactor]

 

[lightning F57]

Fiat currency is backed by confidence only these days in the 70s the US had backed with actual gold. Now for any currency to replace the dollar that would require a greater confidence in that currency for countries around the world to use that for trade, exchange, for maintaing value like when you put money in savings accounts.

The confidence comes from having a strong government, somewhat transparent and open market system so people wouldn't be scared that the new currency will be worthless if they were to hold lots of it. The currency is backed by a country which is financially strong, has modern infrastructure and ability to offer products services needed around the world. Having a modern banking system which can provide various finnancial instruments and products will also be very important.

Now China has quite allot of the above but the US has alot more. The product the US gives the world (US dollar) has been around longer so has historical confidence value and a brand which all countries around the world recognise. This isn't the case for the yaun yet, but like apple when they made their smartphones cornered the market other brands like Samsung popped up and started to take some market share, same is happening with the yaun. The thing is though trying to replace the US dollar will take a long long time right now only the EU or China are the only contestants.

 

[jhungary]

Fiat currency is backed by confidence only these days in the 70s the US had backed with actual gold. Now for any currency to replace the dollar that would require a greater confidence in that currency for countries around the world to use that for trade, exchange, for maintaing value like when you put money in savings accounts.

The confidence comes from having a strong government, somewhat transparent and open market system so people wouldn't be scared that the new currency will be worthless if they were to hold lots of it. The currency is backed by a country which is financially strong, has modern infrastructure and ability to offer products services needed around the world. Having a modern banking system which can provide various finnancial instruments and products will also be very important.

Now China has quite allot of the above but the US has alot more. The product the US gives the world (US dollar) has been around longer so has historical confidence value and a brand which all countries around the world recognise. This isn't the case for the yaun yet, but like apple when they made their smartphones cornered the market other brands like Samsung popped up and started to take some market share, same is happening with the yaun. The thing is though trying to replace the US dollar will take a long long time right now only the EU or China are the contestors.

Wouldn't think China is a serious contender in this, EU probably, but other than EU, I don't think anyone have the infrastructure to support a replacement currency to topple the US in the next 50 years, and that also depends on how US-EU relationship is, because unless it changed drastically, they will still back US monetary policy, which make it impossible to contend with by any sort or means for a foreseeable future.

I said it many times, I am all for US to withdraw from world reserve currency, I don't' want my money to be used and dictate other countries financial policy, I want my money to pay tax, and use it on infrastructure and not sitting on some other central bank to balance forex, the problem, the only viable solution now is for the world to agree on some sort of global trade certificate, and to do that, US itself have to agree with the change.

But even so, I doubt the US will be taken off the dominant and hegemony, if this have to happen, then US would probably have a towering say on policy on such certificate.

 

[sutton999]

Well, I still remember my Chinese bank account have halved the money overnight in 2015

Why China is devaluing the yuan

China says it is a one-off move, but BBC Asia Business Correspondent Karishma Vaswani says there are several other reasons behind China's devaluation of the yuan.

www.bbc.com

In your dreams,

 

[jhungary]

In your dreams,

lol...I probably want to have a date with some supermodel in my dream then China devalues my currency, it would suck big if I dream about how China devalues my currency, at least let me dream of driving a Ferrari F8....

 

[lightning F57]

Wouldn't think China is a serious contender in this, EU probably, but other than EU, I don't think anyone have the infrastructure to support a replacement currency to topple the US in the next 50 years, and that also depends on how US-EU relationship is, because unless it changed drastically, they will still back US monetary policy, which make it impossible to contend with by any sort or means for a foreseeable future.

I said it many times, I am all for US to withdraw from world reserve currency, I don't' want my money to be used and dictate other countries financial policy, I want my money to pay tax, and use it on infrastructure and not sitting on some other central bank to balance forex, the problem, the only viable solution now is for the world to agree on some sort of global trade certificate, and to do that, US itself have to agree with the change.

But even so, I doubt the US will be taken off the dominant and hegemony, if this have to happen, then US would probably have a towering say on policy on such certificate.

Actually I forgot the only other contestant to the dollar with a deeper, richer history. That is gold. When the dollar is weakening you will always see gold prices go up, when the dollar is in a position of strength gold prices fall. There may not be sufficient gold in the world for trading purposes to replace the trillions of dollars around the world. But that may not be a bad thing too if it controlled inflation.

I can't see the dollar being replaced any time soon. The EU and China benefit from it too, they hold billions of treasury bonds which give them income in interest payments.

 

[jhungary]

Actually I forgot the only other contestant to the dollar with a deeper, richer history. That is gold. When the dollar is weakening you will always see gold prices go up, when the dollar is in a position of strength gold prices fall. There may not be sufficient gold in the world for trading purposes to replace the trillions of dollars around the world. But that may not be a bad thing too if it controlled inflation.

I can't see the dollar being replaced any time soon. The EU and China benefit from it too, they hold billions of treasury bonds which give them income in interest payments.

doubt gold would be another contender. I mean sure before they were readily tradable, maybe, unless government in the world started some sort of buy back scheme, they aren't going to make it because if I am not wrong, privately held gold are more than government held gold. This would have been an issue on top of why we ditched gold standard after WW1.

Can those issue be solved? Yes, unlikely but yes, however, this is going to be a lot more complicated to switch back to gold once they are available to the public.

 

[beijingwalker]

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