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Meet The World's New Reserve Currency: The Chinese Yuan

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posted on Oct, 26 2008 @ 12:36 AM
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Meet The World's New Reserve Currency: The Chinese Yuan


www.infowars.com

China has the world’s largest reserves at $1.9 trillion followed by Japan at more than $1 trillion. Clearly the two richest nations will set the agenda and play a central role in deciding how best to deal with the global recession.The November summit in Washington could produce some unwelcome surprises which were hinted at by Thailand’s Deputy Prime Minister, Olarn Chaipravat, who told Bloomberg News: “The message of this initiative is for China to consider whether or not China would open up its banking system and allow the strongest currency in the world, which is the Chinese yuan, to be the rightful and anointed convertible currency of the world.”

Surely, the present financial malaise which has its roots in Wall Street and at the Federal Reserve, has demonstrated that the dollar must be replaced as the world’s “reserve currency” and that America must be deposed as the de facto steward of the global economic system. Leadership implies responsibility and the US must be held to account for its failings. It’s time for a change.

(visit the link for the full news article)



[edit on 26-10-2008 by DimensionalDetective]




posted on Oct, 26 2008 @ 12:36 AM
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Hmm, although I'm not entirely sure I agree with all of this, I DO wonder how much longer the dollar can take this endless "creation out of thin air" idiocy the fed keeps propegating to keep the current fraud and greed institutions running.

I've seen reference to the Euro perhaps becoming the new dominant world currency, as well as the possible creation of the "AMERO" and hint of a "tri-polar currency" between Asia, Europe, and the U.S...

But could China ALONE perhaps take over as the new biggest player on the financial block with the Yuan?

Something to keep an eye on IMO...

www.infowars.com
(visit the link for the full news article)



posted on Oct, 26 2008 @ 01:04 AM
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Originally posted by DimensionalDetective
But could China ALONE perhaps take over as the new biggest player on the financial block with the Yuan?


I believe this was the point all along. I'm not an economics expert, but what I've seen in this "crisis" of war and finances is a consolidation of wealth in preparation for a new world power structure. It's been coming for a while now.


[edit on 26-10-2008 by TravelerintheDark]



posted on Oct, 26 2008 @ 01:17 AM
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Originally posted by DimensionalDetective

But could China ALONE perhaps take over as the new biggest player on the financial block with the Yuan?


You are right that the U.S. cannot be the dominant player any longer because its economic policy is crazy. China cannot be the dominant currency though either. China, you must remember, is still a developing country. Who cares if they have a lot of reserve currency or not?! They have a lot of reserve currency because everything is made there. If their currency was dominant, they would have a very high valued currency. Something the Chinese government does not want. The Chinese government wants its country to still grow at 10% a year so the hundreds of millions of impoverished people will not get pissed and overthrow them. They cannot do this if they other countries are not sending business orders over there.

It won't happen. The Euro is iffy too.



posted on Oct, 26 2008 @ 04:16 AM
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reply to post by DimensionalDetective
 


Interesting article!

Here is my view of things for whatever is worth.

China is "standing on a moneypot" according to economic analysts.
It means they have money reserves to burn should some need arise.

Can this help China qualify as the new money superpower?
Hell, can this even help China qualify as simply a superpower?

The answers are No and No.


I have mentioned the only good thing about the Chinese economy. Everything else is negative.
This has been addressed from the perspective of, what plus is there for the rest of the world, the global economy, in simpler terms, you, me and everyone else.

Here is why:

The common Chinese folk likes to save money, that means keep money under his/her mattress for a rainy day.
Currently from the 1.500.000.000+ people living in china the 800.000.000+ of them are still categorized by any sense there is as farmers. These are primarily the people that SAVE money, they know nothing else. Apparently they are not the only ones. Chinese in general were buying gold like crazy, with the need to save to a more stable reserve than their yuans. There is nothing wrong in that, nothing wrong with saving, in fact its a good thing, but only for the one who does the saving, it is not good for you, me, or the hundreds of thousands of the unemployed Chinese factory workers recently in the toy production sector, which WAS mainly a sector dealing with EXPORTS. I capitalized the "was" word, because it is no more, at least not like it used to be.
The other day there was demonstrations of ex workers belonging to the medium to small size toy manufacturers who are now out of business and were measuring up as aprox. the half of the toy manufacturing sector capacity in China. These people are now out of jobs.

The main delema the current Chinese goverment is facing is whether they can change the main farmer persona from a money saving person to a credit card credit spending and debit holding person, for their average spending capacity to help cover for creation of new jobs that the current Chinese government desperately needs.
So China is shifting OR is TRYING TO shift their work force to cover for their internal needs, as there is NO MORE NEED from a perspective of Global demand FOR THE VOLUMES OF GOODS THAT CHINA USED TO EXPORT.

Chinese government wishful thinking is to try to equip with credit cards as much as many Chinese farmers they can get their hands on, creating a credit spending spree that might save their economy from showing declining trends. A decline is fairly visible. So the Chinese government is about to begin a second spending spree like in around 1997 in order to establish infrastructure in their rural areas, the rest of the places left untouched from the Chinese industrial boom a decade ago. A boom which was the culminative effort of 3 decades of planing and spending. It didn't happen in a single day.

For the above reasons I do not believe that China currently can hold as an economic supergiant in US shoes. Maybe US would want that too, but we won't see this happening soon anyway, if ever. Another reason is that US had the ability to help generate trust to the rest of the monetary players across the globe. China clearly has neither the ability nor the intent (yet) to do so.
US had abilities in that sector, China hasn't, so no we can't rely on the Chinese to save global economy because they are not even sure if they can rely on themselves.

[edit on 26-10-2008 by populardisbelief]



posted on Feb, 25 2009 @ 08:31 PM
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All you have to do is look at the evidence.

A week before the last G20 meet in 2008, China and Russia had a long secret meeting of their own in Moscow.

In Asia News(also mentioned in Bloomberg), it was clearly reported that China is initiating a currency experiment in Asia - initially using the yuan as the reserve currency. And Russia is also, strangely, part of this Asian currency experiment. The likelihood is that other Asian countries will scramble to the yuan as a reserve currency, because it will be the strongest and most stable currency in the world(..unlike the dollar). To me this change in Asia makes complete sense, since the US government has always looked after the US Dollar with "benign neglect". Time to pay the piper I think...

I've also read that China will be reducing its rate of purchase of US Treasuries and will revert to its pre-Bailout rates. This is due to Bernanke trying to 'inflate away' America's huge foreign debts using 'quantitative easing' - by massively inflating the dollar. China is now fully aware of this ruse, and my guess is she will slowly tail off purchasing of Treasuries completley - in order to buy time to decouple from the dollar, switch into her huge domestic markets, and switch her external markets to the Middle East, India and Europe.

China has also been purchasing significant quantities of gold - one of the reasons why spot gold has gone up 20% since Oct 2008.

All these reasons support China's new reserve currency play, and this is all part of market wealth migrating from West to East.



posted on Feb, 25 2009 @ 08:49 PM
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reply to post by DimensionalDetective
 



Actually, China has been experiencing last-minute shortfalls due to the global crisis, as well as unfulfilled demand for raw materials.

There seems to have been a push to demonize the Chinese and the Indians for maybe the past year or so.



posted on Feb, 25 2009 @ 09:01 PM
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They way I see it, go to any developed, or even moderately developed country , and the population will either accept US dollars as payment, or at least know what a US dollar is and looks like. Can't really say the same about the Yuan. I know China is buying up Panama, but I can't imagine Panama switching currency from the US dollar to the Yuan.

Besides, the dollar had been getting stronger of late.



posted on Feb, 25 2009 @ 09:15 PM
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As someone whose been digging the trenches of these stalwart economic times I must admit that I am not surprised by this one bit. The world has been waiting for this for a long time. And China has been working on becoming a major economic player by holding down their currency for years. If they open up their financial markets and people start to depeg from the dollar watch out. China's currency will shoot to the moon and they will be swimming in a sea of prosperity while our dollar devalues to the point of our destitution. I'm still betting it will happen this year.



posted on Feb, 25 2009 @ 09:19 PM
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Will we see a shift in oil sales from the Petro-Dollar to another currency?

I know Iraq "tried" it , Iran talked about it .....and Venezuela thought about it .


Strange days have found us.



posted on Feb, 25 2009 @ 09:38 PM
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Originally posted by stevegmu
They way I see it, go to any developed, or even moderately developed country , and the population will either accept US dollars as payment, or at least know what a US dollar is and looks like. Can't really say the same about the Yuan. I know China is buying up Panama, but I can't imagine Panama switching currency from the US dollar to the Yuan.

Besides, the dollar had been getting stronger of late.


The dollar is faking it. Remember who holds our debts. China Japan and Saudi Arabia. China is declining, but not as fast as Japan and SA. So I'll focus on them:

Saudi Arabia is largely exposed to our CDO fraud so they have lost a great deal of their wealth as a result. Adding to this is the price of oil, which to SA is essentially an oil shock. OPEC just ordered more production cuts but this won't keep the man at the door from knocking. OPEC knows this. SA also has large subsidies programs similarly to the US. Because of these loses they may start calling in those Bonds. That's capital flight.

Japan is extremely exposed to our financial crisis and are directly tied to our bond market. They have experienced a 12% contraction in GDP 10% is a depression officially. They have doled out 3 very large stimulus bailouts to no avail and the savings of that country are being destroyed by a falling Yen. They will DEFINITELY call in those bonds for domestic spending. That is 1.2 trillion in Capital flight right there.

China is in danger as well, they are largely exposed to our CDO fraud as well, but they have a trump card, their home demand is a very large market and they have a highly valued currency with a stable financial system. They have doled out 1 bank bailout(It worked because it was very finely targeted) and one stimulus which is set to go into effect soon. The stimulus is almost wholly infrastructure. China is getting ready to be the powerhouse we've all speculated them to be for decades. This makes the Chinese Yuan a clear alternative to the US reserve standard.

Some would say the Euro is a good switch peg but many have their doubts due to their entanglements with the US. The sterling is losing value on a fairly regular basis. And Eastern Europe is the driver. Regardless, any decoupling from the dollar at all would destroy our currency and force a run. And it will start with capital flight. When you finance deficit spending in the way we do when people call in their bonds they convert from dollars and denominate in their respective currency. This sends dollar reserves back home where it causes inflation. In the VERY short term this causes a rise in the dollar, but it doesn't last. The dollar WILL crash soon. We've already seen a $600 billion dollar call from Asia(no one has managed to track it down, but rumors are it was Korea) and this sent the dollar shooting up because it created a small bubble of demand. It won't last.

The dollars recognition and popularity has little to do with it's viability.

[edit on 25-2-2009 by projectvxn]



posted on Feb, 25 2009 @ 11:23 PM
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t see it that way. Saudi Arabia, Japan and China need us far too much to call in payment for all the bonds. yes, they would get money which would help temporarily, but then what? Who will they trade with. I many people here are worked up into a frenzy over our slowdown, but we are far better off that our European or Asian competitors, and all forecasts I have seen show us getting out of this far sooner. The Euro had its day, but I believe that fad is over. Stability is what makes currencies desirable. We have it, the Eurozone no longer does. Saudi Arabia owns a fairly insignificant amount of treasuries.



posted on Feb, 26 2009 @ 07:44 AM
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You act as though there's only one trading partner in the world. Secondly, they don't need us. No one does. That's why they want to decouple from the dollar. Besides that the longer they're attached to our hip the more danger they are in of being dictated to by us, or being invaded for not playing ball.

I recommend reading news media from the rest of the world. American media colors everything in a rosy fashion to make people in this country think the world actually needs us and our Bull#. I don't know what forecasts you're looking at, But I'm looking at government data from around the world. And SA owns 8% of this country. I'd say that is significant.

[edit on 26-2-2009 by projectvxn]



posted on Feb, 26 2009 @ 08:43 AM
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I am certainly no economic expert but I think one of the major reasons we are in our current condition is the idea of an American Empire. Post WWII the spoils of war. Most other countries were in a shambles and required our assistance.

I believe we need to restore tariffs and bring our manufacturing back home.
Fair trade not free trade chasing the lowest labor costs around the world has weakened our country.

Fact is once the energy issue is resolved and we a fully self sustaining we won't need these folks at all. But it seems that TPTB want to use the petrol dollar as the reserve currency and they are willing to sacrifice our country for their greed.

I am an American and I don't want an empire...I don't want to be the world's cop. Secure our borders, protect our jobs, take care of ourselves first and let the world take care of their own problems. Stop being China's best customer. Trade with China...sure but with tariffs that protect American jobs!



posted on Feb, 26 2009 @ 08:50 AM
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Inflation the cause of all our troubles!

Monetary Inflation, the other cause of the economic bonfire!

There you go. Those are the reasons why all these bailouts have doomed our country to the back burner. To the people who said China and Japan are the up coming Economic super powers of the world: Bravo, you were right.

Not only does China own the US's debt, but they also produce most of the stuff we buy. That "Made in China" sticker on everything? Yeah. The reason why we are doomed.

DOOMED I SAY.

--> Gloomy Predictions for 2009



posted on Feb, 26 2009 @ 08:53 AM
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Whats wrong with the euro exactly? europe is the largest economic super power in the world and its membership is growing.Im not a financial expert though..but surely with membership still growing we would be one of the front runners against china and india as an economic super power?



posted on Feb, 26 2009 @ 08:59 AM
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Originally posted by Solomons
Whats wrong with the euro exactly? europe is the largest economic super power in the world and its membership is growing.Im not a financial expert though..but surely with membership still growing we would be one of the front runners against china and india as an economic super power?


It is another fiat currency backed by nothing and used to compete with the dollar. It is going to do nothing but fall flat when ours does. When you use a currency for the SOLE purpose of countering another currency you're essentially begging for your own currency to be at the mercy of the currency you are competing with. It is bad policy and whether they admit it or not, it is pegged to the dollar, but against it. it's hard to explain but the Euro is a convoluted piece of monopoly money.



posted on Feb, 26 2009 @ 09:15 AM
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Ah your right,again i have no idea about finanace just checked and the yuan is backed by the silver standard it seems,which is a surprise to me.Apologies

[edit on 26-2-2009 by Solomons]



posted on Feb, 26 2009 @ 09:23 AM
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Originally posted by Solomons
Ah your right,again i have no idea about finanace just checked and the yuan is backed by the silver standard it seems,which is a surprise to me.Apologies

[edit on 26-2-2009 by Solomons]


No apologies needed. If you didn't ask questions you'd never get an answer. The Chinese also have a HUGE gold market and since 2002 have been allowing citizens to buy gold. Why would you imagine that is for?

Decoupling. The dollar is doomed and the smart countries are not going to stick around for the fireworks.



posted on Feb, 26 2009 @ 09:25 AM
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Originally posted by Leo Strauss
I am certainly no economic expert but I think one of the major reasons we are in our current condition is the idea of an American Empire. Post WWII the spoils of war. Most other countries were in a shambles and required our assistance.

I believe we need to restore tariffs and bring our manufacturing back home.
Fair trade not free trade chasing the lowest labor costs around the world has weakened our country.

Fact is once the energy issue is resolved and we a fully self sustaining we won't need these folks at all. But it seems that TPTB want to use the petrol dollar as the reserve currency and they are willing to sacrifice our country for their greed.

I am an American and I don't want an empire...I don't want to be the world's cop. Secure our borders, protect our jobs, take care of ourselves first and let the world take care of their own problems. Stop being China's best customer. Trade with China...sure but with tariffs that protect American jobs!


I thought about the tariff thing too. But I threw that idea at a few people much smarter than I and they pointed me in this direction:
en.wikipedia.org...

This destroyed American trade and made the depression a million time worse. I'm for an interstate fair tax:

en.wikipedia.org...



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