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While Roubini is out there..he did see this economic fiasco coming back in 2006. The article does have some strong points though and China is in a much better position to take over.
We are limping along and there seems to be no end in sight to the deficits we keep accumulating.
I'd have to agree with Traderx,
The ability to control the world currency would have to be forcefully taken from American bankers. Most likely any major challenge would result in a war and bloodshed of the peons to maintain hegemony or die trying.
There's a reason why we spend so much in military expenditures in preparation of this eventual end game and why we broadcast our might so readily as a deterrent.
If I was China, I'd lean away from American debt and focus on building up internally. There's no way in hell America can repay additional debt borrowed being over 70%+ leveraged without devaluing the currency/money supply with weening domestic production.
The last pure investment property I bought was back in 2002 or so, after which I just kept saying "I don't see how people will ever see any appreciation at these levels.", if that makes me a bear...
But seriously, the YUAN? Why? Because China is SO open, and SO honest, and SO trustworthy, and SO responsive to pressure from other countries? Come on now!
While I don't know about the yuan becoming the dominate currency because of the actions of the chinese goveranment in the last decades;I do believe there is a real chance that china will lead the world out of this recession instead of the US for the first time.Theior stimulus certain looks more aimjed than ours does to pure infrastructure improvements.
While Roubini is out there..he did see this economic fiasco coming back in 2006. The article does have some strong points though and China is in a much better position to take over.
We are limping along and there seems to be no end in sight to the deficits we keep accumulating.
I don't see the yuan becoming the world's reserve currency any time soon, but I do think that smart eyes watch China for signs of economic recovery. The U.S. is no longer the sole superpower-- perhaps not even the penultimate one-- and nobody had to take anything forcibly from us. We handed it right over... and we continue to do ourselves in. The enemies we most need to fear live right here, where all those defense dollars won't do any good at all.
So let's look at history..Britain used to be king of the hill and was a creditor nation.
WWII came and they became a debtor nation and fell from grace.
US then was the creditor nation and rose to the top.
Today we are a debtor nation. There is no fix in sight to turn this around.
China has already done about $100 billion worth of currency swaps with other nations.
China is a creditor nation right now and can lend to anyone in the world if they so desire.
I just wouldn't dismiss this so quickly. The US can't stay on top forever. We've shot both feet and are relying on foreign lenders or our own Fed to keep us going financially. If the US should get dropped from their AAA rating (which IMHO we shouldn't have) then that would make the other countries scramble to find a new currency.
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