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Old 07-12-2017, 01:20 PM
 
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I just read this interesting article in the Economist about America's strong Dollar policy and how it is tied back to the fact that the American dollar is the world's reserve currency since the end of WWII

It essentially lists the pros and cons of this policy.

https://www.economist.com/blogs/free...njured-reserve

What would be the benefits and consequences of weakening our dollar and excusing it from being the world's reserve currency?
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Old 07-12-2017, 01:27 PM
 
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Read China's central banks report released in 2009 called "reform the international monetary system".

In other words, the sdr with a basket of world war 2 victory countries (us, china, and U.K.)....excluding Russia of course. And then the two world war 2 victory zones of the u.s (euro and yen).

Being the main reserve currency is a tremendous benefit to the United States, but it also is a curse that will destroy the country (eventually, if no changes are made)
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Old 07-12-2017, 02:22 PM
 
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Quote:
Originally Posted by Thatsright19 View Post
Read China's central banks report released in 2009 called "reform the international monetary system".

In other words, the sdr with a basket of world war 2 victory countries (us, china, and U.K.)....excluding Russia of course. And then the two world war 2 victory zones of the u.s (euro and yen).

Being the main reserve currency is a tremendous benefit to the United States, but it also is a curse that will destroy the country (eventually, if no changes are made)
That's interesting because that report was released right after the crash. I've got to be honest though, I'm struggling to see how this benefits the majority of people in the U.S.. The article makes some solid points about how the strong dollar and reserve has been problematic for production but it has been good for worldwide trade.
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Old 07-13-2017, 09:27 AM
 
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There is more than one "reserve currency" in the world, and status as one is not bestowed by some panel of beauty contest judges. Such status accrues through the cumulative behavior of millions of economic actors all over the world. As the US produces about 22% of everything that is produced anywhere in the world and has long been deeply engaged in international trade, US dollars are quite naturally used as a reserve currency. Things could not realistically be any other way.

By the way, SDRs are a reserve asset, not a currency, and as opposed to the US's 22% share of of world GDP, about 42% of the the value of an SDR comes from the US dollar.
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Old 07-13-2017, 09:33 AM
 
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Are you intentionally this arrogant? This will pretty much be my last post to you.

My post clearly says "main" reserve currency. Which means I know there are others. Why are you explaining it?

I didn't say the sdr is a currency. Why are you explaining how it's weighted? I know it's weighted hence I said multiple times that it was. The report from the Chinese suggested it should be used as a reserve asset instead of the dollar because 1 country being this dominant (60%) of reserves is ultimately bad for the world and for America because it has conflicting obligations of monetary policy at home...and abroad. Then of course you provide a useless lesson in how fractions work when you outline the sdr weight for the dollar is higher than its GDP weight in the world? Are you telling me that a base that includes 5 countries is smaller than the one that includes all countries with different currencies? Thanks.

Then of course you have a tangent about beauty judges. The thread is saying the dollar earned its status, but the question is....maybe the beauty queen is showing signs of age and doesn't deserve such high marks anymore. Of course this faith is measured everyday by the markets....but as China's central bank points out....perhaps the historical groundwork is distorting the world economy and causes the very crisis it seeks to avoid.

Yet another meaningless post from you. Unreal.

Last edited by Thatsright19; 07-13-2017 at 09:44 AM..
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Old 07-13-2017, 02:30 PM
 
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Originally Posted by Thatsright19 View Post
Are you intentionally this arrogant? This will pretty much be my last post to you.
Well, I can still see all of your posts, so I will continue to reply to some selection of those that commit the most grievous sorts of economic error.

Quote:
Originally Posted by Thatsright19 View Post
The report from the Chinese suggested it should be used as a reserve asset instead of the dollar...
Both are already used as reserve assets, and the Chinese report was written in reaction to the onset of the Great Recession. It supposes that the effects of that calamity might have been lessened if more assets had somehow been held in other than US dollars. That's entirely and tendentiously speculative, and the argument itself should be viewed much more as representing a political than an economic assessment.

Reserve currencies are meanwhile those commonly noted by national governments as reserve assets in their national reporting and in reporting to the IMF. That's pretty much all there is to it. Some such currencies are used globally while some are used regionally. Chinese opinion of course applies only within China.
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Old 07-13-2017, 02:58 PM
 
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You say their central banks position is political but yet it seems far more rational and fact based than any argument to keep the system as it is. Keeping the status quo would be the political based argument.

That's not what the report "supposes", so you clearly didn't read it. They point out how the u.s position for the federal reserve having to meet its mandate at home is often different than what it should be doing in its role for the world. In other words, this distortion in monetary policy causes the problems here and or abroad. One country shouldn't be in this position because they will always be put in a tough spot. It's very well known what the benefits and downsides are to the u.s. They did not say holding sdr vs usd would magically make things right as you said.

The rest of your response is literally chinese opinion matters in china and reserve currencies are held in reserve. And then saying I'm wrong because I'm wrong.

Ok....riveting.
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Old 07-13-2017, 03:46 PM
 
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Chinese financial concerns at the time were most significant with regard to fears that US agencies might resort to monetary policy that would undercut the value of all those Chinese trade-surplus dollars invested in dollar-denominated assets. At the same time, China was and long had been interested in carving off some bits of US stature and influence simply to create more room for its own.

The answer here is 4, but if you can't put 2 and 2 together, you'll never get to it.
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Old 07-13-2017, 04:06 PM
 
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Quote:
Originally Posted by Pub-911 View Post
Chinese financial concerns at the time were most significant with regard to fears that US agencies might resort to monetary policy that would undercut the value of all those Chinese trade-surplus dollars invested in dollar-denominated assets. At the same time, China was and long had been interested in carving off some bits of US stature and influence simply to create more room for its own.

The answer here is 4, but if you can't put 2 and 2 together, you'll never get to it.
So they act in their best interest and we try to act in ours. Thanks for spelling that out.

Their motive doesn't nessisarily mean their argument is any weaker.

In your next post you might explain that water is wet....or 2 plus 2 is 4. Oh wait, you covered that.
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Old 07-13-2017, 04:21 PM
 
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Originally Posted by Thatsright19 View Post
So they act in their best interest and we try to act in ours. Thanks for spelling that out.
What I spelled out was a rational and dispassionate in-context interpretation of some of China's 2009 claims and statements. That was a first for this thread.
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