Do Americans cheat? Yay or nay?

[Lightningbolt]

In effect yes. Still nobody force anyone to buy US bond

You can do whatever you want, but in the end the world have to depend on either USD itself or the exchange rate of USD, I simply cannot see how the other market can set a new trading standard outside USD for any foreseeable future, no one currency is strong enough to do

But meh, that's the world we live in

Couldn't answer my question so ran to the mods again I see

 

[Götterdämmerung]

Of course the US cheat, they cheat on grand scale. What is even worse is their hypocrisy, incessantly pointing fingers at others crying cheater.

 

[Sugarcane]

In effect yes. Still nobody force anyone to buy US bond

You can do whatever you want, but in the end the world have to depend on either USD itself or the exchange rate of USD, I simply cannot see how the other market can set a new trading standard outside USD for any foreseeable future, no one currency is strong enough to do

But meh, that's the world we live in

Not in near future but surely era of gold coins & barter trade or something similar to this modal will return because US is crossing the limits by using currency to bully anyone in world - while others have to wet their a$$es and work hard to earn - they do it by simply printing "In God we Trust"

 

[[Bregs]]

America has different standard on same issue for different countries depending upon there own intrests

 

[jhungary]

Couldn't answer my question so ran to the mods again I see

Lol if I approached the mod, you would be banned already ask your buddy destro. the fact I ignored your post saying something

If you are going to throw insult at other user, you naturally expected to be removed.

Ta-ta

 

[SarthakGanguly]

The average American is honest and hard working.

 

[Lightningbolt]

The dollar will be replaced by the RMB by 2025-2030. That's my prediction.

Why? Increasing Chinese Demand!

You need to become an economic power (manufacturing, trading, consumption) before you become a financial power (currency usage, influence financial markets). You need to be a large trader that exports goods and imports goods. Having a large consumer market is vital as foreign countries want to sell their goods to your market.

You see, the USD came to become the reserve currency when the US was the largest global trader (exports + imports) and had the largest gold reserves (gold reserves don't matter that much now because we are in a fiat currency system, not a gold standard).

But now China is the largest global trader of goods. China is now the largest trading partner to more countries than the US. Chinese demand for agricultural, energy, raw materials and manufactured goods are on a staggering rise. Many countries now consider the Chinese market bigger than the US market for their goods.

This means there is a large demand for RMB among trading partners as they are selling to the Chinese market. This means more companies are willing to hold and pay in RMB because it reduces exchange rate risk of using the volatile USD. This saves billions of dollars as traders don't have to keep a risk premium on the price of their goods as a hedge against exchange rate fluctuations. This means using the RMB will reduce price of imports and make your goods more competitive in the Chinese market.

For a reserve currency to be established, you need to build the financial architecture. China is currently building that architecture. It started around 2009-2010. You need the following to establish a reserve currency:

1) Develop the domestic capital markets (financial and commodity). This means developing a deep and liquid government bond market for global investors holding RMB to put their money. Government bonds are always preferred asset as it's the safest bonds you can invest in. You need to develop a yield curve that's set by the market without government interference. In addition to bonds, you need to develop the equity markets, and commodity markets by giving derivatives such as futures and options for various commodities. China already has the 3rd largest bond market. China has been building the capital markets by expanding the bond market (junk bonds, government bond futures, etc) and commodity futures. (industrial metals, precious metals, agriculture, energy). More need to be done in this area.


2) Capital account convertibility. You need to be able to use offshore RMB and be able to use it in China. That means direct investment, portfolio investment and other investment must be freely done without restrictions. China is now forming offshore RMB centres in Hong Kong, Taiwan, Singapore, Britain and others so that offshore RMB can invest in RMB-denominated assets. This is because the onshore market still has capital account restrictions. Only the current account is convertible. China has said the capital account will be fully convertible by 2015-2018.


3) Direct trading of currencies. China has already allowed direct trading in the Japanese Yen, Australian Dollar and British Pound. More currencies will be allowed to directly trade with the RMB. Direct trading between two currencies allows the trading partners to bypass the use of the USD as an intermediate currency. With indirect trading, you must use the RMB and buy USD, then use those USD to buy Australian dollars. But if the RMB can directly trade with the Australian dollar, you can buy and sell Australian dollars without first buying the USD.


4) Usage of RMB in trade, investment and finance. Once the first 3 points are developed, the RMB usage in trade, investment and finance will increase. Around 15-20% of China's trade is already done in RMB. Some banks and companies are now issuing RMB-denominated bonds. China has currency swaps with 24 countries which is one way for foreigners to obtain RMB.


5) Reserve currency and anchor currency. As the usage of RMB in trade, investment and finance increases, countries will automatically hold RMB as part of their reserves. Countries that trade heavily with China like Japan, Australia and Nigeria already hold a portion of their reserves in RMB-denominated assets. I expect more countries to hold RMB in their reserves. Nigeria has even said they will accept RMB for their oil exports. It's quite incredible some big countries are already holding RMB as part of their reserves when the RMB is still a closed currency. Anchor currency is when other currencies peg their currency to the yours. This allows you to export your inflation as the pegged currency has to absorb your currency when you devalue your own currency in order to keep the peg.

Renminbi is now the:
- 8th most TRADED currency.
- 12th largest PAYMENTS currency.
- 9th largest TRANSACTED currency.

 

[jhungary]

Not in near future but surely era of gold coins & barter trade or something similar to this modal will return because US is crossing the limits by using currency to bully anyone in world - while others have to wet their a$$es and work hard to earn - they do it by simply printing "In God we Trust"

As I said on the other post, the gold standard is not feasible. That's the same as using oil as a standard. What if I say we should all use oil as world currency? Oil price controlled by barrel drill per day, the more oil drilled the cheaper the price. Same way as gold. The reason why gold have it value because they are precious metal. If you use gold as a standard then 2 things will happen

1.) the current gold standard is also controlled by USD (gold is priced at USD) if you had to make gold as standard, the standard will be an US derivative. Now if you are US government, you know the world is changing to gold trading standard? And you know gold is sold at USD, will you sabotage the system?

2.) there are only limited amount of gold on earth. You cannot expect people to "recycle" their gold. Many people buy gold for collection and for ownership. So you would expect a portion of Non-circulatable gold out there. The problem can be solve if the currency is paper money, which you only need to reprint it. But if the world have limited amount of gold, how you tactle the non-circulation problem? You can't make more gold appear.

All in all, world largest gold deposit is in Africa (south Africa tobe exact) if we change to a gold standard, the. Basically you are saying we put the world economics on the hands of African nation. Do you want to take the risk?

If I have to choose one commodity to replace the USD system, I would choose salt. Where it is abandant in nature and everybody can produce it, so no one can hack up the price.

And barter trade system was abolished by modern economist for a reason....

 

[Sashan]

lol ....Either your blind or have issues with comprehension.... Go read up those links..it clearly states that countries are beginning to bypass the Dollar in international trade.... You cant ignore the links and the facts i provided and claim i did not prove anything .... I simply claimed the Dollar is being less and less used as an international currency for trade and i provided links to prove that . if you want to sit around in sheer ignorance..thats your choice...

Rest of your post is irrelevant as i never claimed the Dollar will collapse . In-fact am unsure what you are even trying to argue on about ..

And about that bolded part , Go check the figures back in 1990 and 2000 and see What part was held in reserve currencies...


@jhungary my point simply being there is an attempt being made to reduce the dependency on dollar and replace that with trade in local currencies, how far that will go is anyone's guess .. but you cant just ignore all the trade deals which have been made by 23 countries directly bypassing the Dollars


Thanks, World Reserve Currency, But No Thanks: Australia And China To Enable Direct Currency Convertibility | Zero Hedge

Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says - Bloomberg

India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees | Zero Hedge

The USD Trap Is Closing: Dollar Exclusion Zone Crosses The Pacific As Brazil Signs China Currency Swap | Zero Hedge

BBC News - India and Japan sign new $15bn currency swap agreement

Dollar no longer primary oil currency as China begins to sell oil using Yuan - National Finance Examiner | Examiner.com

U.K., China Near Swap-Line Agreement - WSJ.com


How far will this go..who knows , but the Dollar is being Bypassed which is my point..

As @jhungary explained, you can't replace dollars even if you try to do trades in alternate currencies and commodities as the prices are mostly pegged at dollar rates.

I am not going to revisit the details again but will give you an example on how dollar changes impacts a trade. UBS lost $2.3 billion in 2011 while trading silver futures against Swiss Francs and the trade is through silver futures vs dollars and dollars vs Swiss Francs and the details are below.

The ETF in question was one which tracked the volatile silver futures market and was priced in Swiss francs, they say. Adoboli's job would have been to hedge, or reduce, the bank's risk on the silver and franc positions by buying and selling each.

It is thought that he may accidentally have left the Swiss franc vs U.S. dollar side of the equation uncovered and got stung when the Swiss national bank intervened to defend the franc in early September.

UBS CEO Oswald Gruebel resigns - Sep. 24, 2011

So you need to chill down on your claims and get the basics and not come up with preposterous reasons especially your reason for war.

 

[Lightningbolt]

Lol if I approached the mod, you would be banned already ask your buddy destro. the fact I ignored your post saying something

If you are going to throw insult at other user, you naturally expected to be removed.

Ta-ta

what a big baby. Never seen a guy so scared to debate that he hides behind a mod.

If I truly wanted to insult ya fella, I would get perma-banned and IP ban.

Kid, I've been messing with ya and you get upset.

Chillax mate

 

[xunzi]

The dollar will remain dominant for quite a long time. We all have to accept this because the confidence in the US economy is still strong despite current ailing economy in the US. But the dollar will not be dominant forever. When Yuan becomes fully convertible and China economy shows progression and stability, countries will exchange and held yuan as currency reserve. Yuan vs dollar will end up the two biggest currency reserve in the 21st century is my prediction.

The gold standard is problematic for those who don't have gold. The SDRs has potential but gives too much power to a few derivative currency in the basket, namely dollar, lbs, euro, yen, and perhaps yuan. It is also distributed in proportion to IMF quotas, so countries that held the highest quotas get richer.

 

[gambit]

what a big baby. Never seen a guy so scared to debate that he hides behind a mod.

If I truly wanted to insult ya fella, I would get perma-banned and IP ban.

Kid, I've been messing with ya and you get upset.

Chillax mate

You debate? That is a laugh. The only thing you are good at is casting insults. How else can we explain your repeated suspension?

 

[jhungary]

what a big baby. Never seen a guy so scared to debate that he hides behind a mod.

If I truly wanted to insult ya fella, I would get perma-banned and IP ban.

Kid, I've been messing with ya and you get upset.

Chillax mate

I would love to debate anyone, if you have any valuable point to debate.

As far as I see, you point is all "I think this and I think that

How do I debate with something what you think is right because you believe is right?

For all I learn, your logic have no ground and you point have no logic, the only "debate" I can do with you is WHEN ARE YOU STOP WASTING MY TIME.

Come back to me when you have some factual evidence with solid reference, not just I say and I think, I will gladly debate you with that. Otherwise, even a word reply to your so called logic is simply wasting my time

 

[jnd3x0]

they may cheat others but they are true to themselves and work for their country's best interest. that many countries lack specially south Asian countries ... I mean people speaking shit for USA over here I bet if USA offer them with green cards no one will have guts to say no lol

 

[jhungary]

The dollar will remain dominant for quite a long time. We all have to accept this because the confidence in the US economy is still strong despite current ailing economy in the US. But the dollar will not be dominant forever. When Yuan becomes fully convertible and China economy shows progression and stability, countries will exchange and held yuan as currency reserve. Yuan vs dollar will end up the two biggest currency reserve in the 21st century is my prediction.

The gold standard is problematic for those who don't have gold. The SDRs has potential but gives too much power to a few derivative currency in the basket, namely dollar, lbs, euro, yen, and perhaps yuan. It is also distributed in proportion to IMF quotas, so countries that held the highest quotas get richer.

Yuan don't need to be fully convertible to complete with USD as world currency, but the Chinese market need to be open and transparent.

A $1 note worth $1 not because this is what the government tell you it is, but it's the investor believe $1 note have $1 value in it. Without Chinese government no interference policy on local financial market, RMB can go no where near competitive.

Imagine you currency can change of face value simply because the government can change the denomination? How secure you feel to invest on that currency? This is what RMB is currently doing.