Yuan going global may be a dangerous idea if China elites is not up to mark. Anyone holding Yuan is a creditor of China, as what happen to USA.
The reserve currency is a double edge sword. The official propaganda is USA goes into debt because the people are lazy welfare queen. So cut welfare, make the poor poorer.
In reality, USA goes into debt because of the demand of dollar as reserve currency.
It gives USA a large advantage over the others, but unfortunately, USA elites use the opportunity to impoverish their people, to do wage arbitration, and to ship factory to China.
The dollarization is what contributed to the rise of China. Under gold standard, there can only be mecantilism.
Good luck if Yuan goes global.
Gold take down is manipulation of gold price to the down side by every single central banks aligned to USA.
I know there is such a thing. I don't know the vocab.
Yeah You're right. But if you peg Yuan with Gold. Then let people trade their currency directly to China's gold, then problem solved.
By becoming the reserve currency, you must let people have your money to use. That means you have to give them your Yuan. How can u do it? By having chronic trade deficit. Does china want to be a chronic trade deficit nation, like US?
There are a lot of disadvantage to be reserve currency. If you implement exactly the same as US dollar, then you go into debt with Federal Reserve. You need to keep issuing bonds for other nation to park their reserve currencies. By doing that, your debt sky rockets.
If China want to dethrone USD, it must not repeat the collapse of USD. Instead she must repeat the rise of US dollar, which was the time before WW1. It was the time when US dollar was pegged with gold.
What do I mean when I say pegged with gold?
During that time, if you have US dollars, you can go US central bank and exchange them for gold at a known fixed price (something like 35 US dollar per troy ounce). Today price is 1350 USD/troy ounce. How much value has US dollar been eroded since then?
Therefore, the only true money is Gold. To dethrone USD, newly born Yuan is not a competitor. Only long time reign Gold will.
Here show the (future) "gold-Yuan" pegged price
A constant function over time.
