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As America and the EU descend into economic chaos, China today announced it will standardize and expand its monetary systems. IMO this is the first move at dethroning the USD from its status as the world’s reserve currency. We are entering a new era where producers will rule affairs of the debtor nations. Today’s actions by the Fed put the last nail in the coffin for U.S. financial leadership.
"China poses the biggest threat to America and is waging a 'full court blitzkrieg' against us, says Bill Bar in escalating rhetoric aimed at Beijing amid fury at coronavirus 'cover-up'"
Quote:
'The U.N. itself has 15 specialized agencies, including the WHO,' Navarro said to host Martha MacCallum.
'What China has been doing very aggressively over the last decade is to try to gain control of those by electing people to the top. It already controls five of the 15, also, by using proxies, colonial-like proxies, like Tedros [Adhanom Ghebreyesus] at the WHO.
'As you can see in this crisis, the damage [done by] that kind of control by China [of] the key health organization has been absolutely enormous. They suppressed the human to human transmission [data], they refused to call it a pandemic,' he added.
Trump's main beef with the United Nations health group is that their directors said it wasn't necessary to ban travelers coming from China when the coronavirus started spreading beyond Wuhan, where it originated.
From building sand island in Japan's waters and claiming the area as part of China to increasing the costs of face masks by 10%. China is a monster and will do anything to take control from the USA.
The rest of the world would rather have USA over China. China has not won yet - but they are gunning for us.
China will never dethrone the U.S. in this position, at least not in my lifetime. Just because China's playing catch up to the West, and the US in particular, doesn't mean they'll ever catch them. China's got way, way too many internal problems to ever be a world leader. They were NEVER in their history, a world leader like the U.S., Britain or even any of the major colonial European powers were. At best they were a regional power, mainly because of their huge population based. All this fear mongering is just that. China can't even get their own house in order, as shown by this virus. How does anyone expect them to overtake the US.
China take over? Maybe eventually, but not in our lifetimes.
Their government is a vicious, dictatorial murderous clique, everyone knows it, and all that prevents the people from toppling the regime and hanging the louts is high sustained economic growth. Just wait until they have a real recession and you'll see some serious unrest.
That said, we in the U.S. have our work cut out for us. We simply have to restore high standards in education and get rid of this ridiculous fixation on social justice which is dumbing us down by the day. Stop teaching our kids that business is evil, socialism is good, the white man must do penance for sins of yesteryear. I've got a kid in high school and it's unbelievable the garbage she's being fed.
And we need to stop doing so much business with them. They need us, but we can survive just fine without them.
No, its still nearly 5% of global reserves according to the IMF.
Obviously, it doesn’t over take the dollar and it’s commanding 62% share, but the pound is still a reserve currency.
The word you are looking for is “irrelevant”. At 5% of transactions/reserves, the GBP is all but irrelevant. Chinese Yuan/Renminbi will soon supplant the Euro which is now secondary to the USD. In ten years it will dominate trade and become the defacto reserve currency. And in ten years the Federal Reserve will still be trying to sell the Beanie Babies held on its balance sheet.
The word you are looking for is “irrelevant”. At 5% of transactions/reserves, the GBP is all but irrelevant. Chinese Yuan/Renminbi will soon supplant the Euro which is now secondary to the USD. In ten years it will dominate trade and become the defacto reserve currency. And in ten years the Federal Reserve will still be trying to sell the Beanie Babies held on its balance sheet.
The yuan can't be the world's reserve currency as long as its value is artificially manipulated to favor exports over imports. If they can ever get to a freely floating currency that can be bought and sold in unlimited quantities, as the U.S. dollar more or less is, then it might become the dominant currency some day, or at least one of 2-3 dominant currencies.
The U.S. dollar is unlikely to lose its dominant status any time soon, though. Among other things, the U.S. is rebounding in manufacturing and energy production these past few years (the virus is just a hiccup) and is going to surpass EU and Asia in export manufacturing in a couple of years.
Faith and confidence in the U.S. dollar is going to increase, not fall. The great danger however is the ballooning national debt, and this $2.2T bail-out isn't helping matters.
The yuan can't be the world's reserve currency as long as its value is artificially manipulated to favor exports over imports. If they can ever get to a freely floating currency that can be bought and sold in unlimited quantities, as the U.S. dollar more or less is, then it might become the dominant currency some day, or at least one of 2-3 dominant currencies.
The U.S. dollar is unlikely to lose its dominant status any time soon, though. Among other things, the U.S. is rebounding in manufacturing and energy production these past few years (the virus is just a hiccup) and is going to surpass EU and Asia in export manufacturing in a couple of years.
Faith and confidence in the U.S. dollar is going to increase, not fall. The great danger however is the ballooning national debt, and this $2.2T bail-out isn't helping matters.
I’m sure the Chancellor of the Exchequer said similar regarding dominance of the Pound when FDR devalued the USD ~30% in 1933.
I’m sure the Chancellor of the Exchequer said similar regarding dominance of the Pound when FDR devalued the USD ~30% in 1933.
Britain's GDP in 1938 was $27B vs. U.S. GDP $84B (this is the oldest figures I can find). In terms of geographical size, the U.K. is 3% that of the U.S. (was slightly larger in 1938, before loss of Hong Kong, and not counting India).
It was obvious to anyone at the time that the U.S. was the dominant economic and geo-political power, moving forward. The U.K. was bankrupt and burnt out after WWI, and they knew they were about to lose India.
The U.S.-China asymmetry is quite different. The U.S. is not like the U.K. of the 1930s, though we do have some problems.
China has huge land mass, but it's surrounded by enemies or frenemies. Its coastline faces hostile neighbors who oppose China's dominance of the South China Sea.
The U.S. has the advantage of two oceans, no hostile neighbors, an even larger land mass to the north that is a close ally & trade partner, and a huge source of cheap labor to the south that is also a large trade partner.
China has a lot of cheap labor, but they have reached a limit in exploiting that labor; people are returning to the villages because the cities became saturated and unlivable. Migrant laborers are treated like second class citizens and can barely make a living. The population is restless, with a lot of anger seething under the surface because of inequities between the ruling class Communists and the peasants & middle class.
(The Wuhan virus has exposed some of this anger, with people in Hubei angrily denouncing their own government for lying & incompetence, for arresting the doctors who were sounding the alarm, denying the problem, etc. Even now, the gov't is fudging the numbers, claiming few or no new cases, when anecdotally people still seem to be dying, the mortuaries are ordering thousands of new cremation urns, and the gov't mysterious canceled 21 million cell phone accounts. There are macabre reports, unconfirmed but from multiple sources, of elderly sick people being cremated while still alive, hospitals just giving up on them and zipping them up in body bags and sending them to the furnaces.)
Anyway, labor costs have been rising for years and China's labor cost advantage has been shrinking. The U.S. actually has the cost advantage now, particularly with the trade war removing China's cheap free access to U.S. markets.
The U.S. economy is double that of China, though in some ways they are now our equal in terms of amt. of cash on hand and purchase-power-parity measurements.
The U.S. also has the good will advantage. It's guilty of plenty of military misadventures and bullying over the years, yet it remains the global standard and immigration goal for billions of people. Culturally, the U.S. rules the world. Politically and militarily, it is and will remain the supreme power in the world for the foreseeable future.
Summary: China's not replacing the U.S. any time soon.
It won't happen until China reforms and stops lying about everything. The US may be printing money, but at least we're up-front about it. No one will ever trust Xi Baba or his party-appointed successor when he dies. I'd put my money in the hardworking ingenuity of the people of China, but I'd NEVER put my money in RED China, where the guangxi of a tiny cabal of PARTY members squanders the toil of a billion people.
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