reply to post by superman2012
Well . . . this is a conspiracy site, so I know some will disagree with me straight away. But, "we" don't all "know" that the US dollar will
collapse. In fact, there are only two ways in which any currency can overtake the US dollar, regardless of value.
One, and in the case of China's Yuan (or more accurately the Renminbi, as Yuan is a generic term that refers to all currency including American),
would be for the Chinese to take political control of the world and outlaw any other currency.
Second, for America to implode and go third world. This would also assume some fortunate country then invades and takes political control of America,
thus replacing the dollar with their currency.
In the first case, we'd have bigger troubles than currency . . . so who cares. In the second, we'd have bigger troubles than currency . . . so, who
All modern currencies are fiat currencies . . . ALL for repetition sake, no modern currencies are based solely on hard assets (like gold). This means
the value is determined solely by market forces (public and private speculators) and the very government that issues it. In America's case, the FED
being the determining factor.
The problem with the Renminbi is that it's value, in the largest sense, is set by the government. A communist government that strickly controls the
flow of information to and from China and is known for being less than honest. How many free countries are going to except the world standard
currency of a country that cannot be trusted to be honest, or even give the illusion of transparency? We can probably agree that all governments are
less than transparent on several issues, but the Chinese take the cake on secrecy and misinformation (with the exception of maybe South Korea and the
old Soviet Block). Now, if China were to democratize and open their doors and books to the rest of the world . . . maybe. But, again, that would
mean a massive revolution in China, just like what would be need in America to "collapse" or replace the dollar.
You may then say . . . "OK, well then what about the Euro?" Well, the EU hasn't even abandoned their respective native currencies and they clearly
have their own economic issues that they can't sort out. So, again, without major world upheaval . . . not going to happen.
Let's say OPEC decided to use the Renminbi as the "petrol-dollar" . . . How much confidence would investors or traders have in the value of a barrell?
You would see the oil profits and prices fall very fast . . . and possible another world war. It's all about confidence in the perceived value when
it comes to investing and trading.
I know people like to cling to fear and books like "Aftershock; however, if you sit and rationally think things through, you'll quickly realize those
issues aren't going to happen without world upheaval . . . And again, the dollar would be the least of anyone's worries at that point.
Now . . . what I would be worried about is the value to investors in holding on to US debt (bonds) with our skyrocketing out of control debt. If
China decided to dump all of their holdings and others followed suit, you could see runaway inflation and conditions in this country would deteriorate
. . . which would probably lead to the doom and gloom you hear about, but would still not "collapse" the dollar. At worst, countries would demand
trade in their native currency.
Hope some of this helped and hope you can see through the fallacy of our dollar "collapsing".
ETA - Here is a short blurb from the wiki on Renminbi to show latest actions on even taking the Renminbi seriously for trade.
Through most of its history, the value of the renminbi was pegged to the U.S. dollar. As China pursued its gradual transition from central
planning to a market economy, and increased its participation in foreign trade, the renminbi was devalued to increase the competitiveness of Chinese
industry. It had previously been claimed that the renminbi's official exchange rate was undervalued by as much as 37.5% against its purchasing power
parity (see below). However, appreciation actions by the Chinese government, as well as quantitative easing measures taken by the Federal Reserve
and other major central banks, have caused the renminbi to be within as little as 8% of its equilibrium value by the second half of 2012
Since 2005, the renminbi exchange rate has been allowed to float in a narrow margin around a fixed base rate determined with reference to a basket of
world currencies. The Chinese government has announced that it will gradually increase the flexibility of the exchange rate. China has initiated
various pilot projects to "internationalize" the RMB in the hope that it will become a reserve currency over the long term
edit on 3/6/13 by solomons path because: (no reason given)