Chinese Yuan prepares big slam against the dollar

Skybird · 03-08-12, 08:33 AM

In Decembre, China and Japan had agreed a treaty that installed the Yuan as official payment currency of equal status for the mutual trade between both countries. The dollar'S status got under pressure, loosing market shares in Asia.

I now read in German news that negotiations between China, India, Brazil, Russia and South Africa have succeeded and that from end of March on China will offer credits in Chinese currency. At the same time, and since quite some longer time already, China has been busy with silenty shifting its currency reserves in dollars, replacing dollars with other currencies, or making a hay-day from the European misery and using the money of these dollar-reserves in shopping tours amongst European top-companies.

Having the Yuan being established as an equal trade currency beside the dollar and Yen in trading with Japan, and even more important: establishing the Yuan now the the credit currency with the BRISC countries, has strong consequences that are easy to be underestimated, but i fact are not. I read that the bank HSBC calculates that the share of the Yuan in financial transactions on all Asian markets would rocket from currently 13% (in Asia) to over 50% in 2015. Globally, the dollar currently plays a role in around 85% of all fincial transactions. With the Asian market turning from US to Chinese currency, this unavoidably causes a blow, and the psychological signal will also add to the overall effect.

Many people in Brussel and even more in Washington will hope and pray that the treaty will collapse in the very last minute. The only reply possible for both would be to just print more money that is not covered by a similiar grow in real assets and materiual values of Wetsern economies. What that means for Euro and dollar, is clear: massive devaluation, and an increase in debt burdens. It is this devluation of the dollar that has made China starting to react poissibly earlier than planned and getting ready to take over the global role of premier currency from the dollar, and reducing China'S immense rerseves in (increasingly worthless) dollars. The policy of the US has costed them many hundreds of billions in recent years, in other words the US actively destroys Chinese wealth. Washington certainly did not seriously expect that it would go like this endlessly, forever.

I think the dominance of the Yuan as the world's lead currency will have been established much sooner than I and we have expected just some years ago. The Euro crisis and the American debt crisis forces them to push the pedal earlier than they had wanted.

And no, I do not think they will stop the massive regulation of their currency anytime soon. They would be stupid if they did. after all, what America and Europe do, is massive currency regulation at the cost of the others, too. One has set the precedent to which the Chinese now can refer. Maybe not that clever a move by us, then.

Catfish · 03-08-12, 10:25 AM

Which of course was the reason for the other wars in the mid-east. The US economy cannot afford to let oil not being sold in Dollar currency.
Only this time, China is not a small fish ..

Stealhead · 03-08-12, 10:34 AM

Once it was said that sun never sets on the British Empire less than 100 years later it most certainly does.No one nation is the biggest kid on the street forever.We are currently in a transition point it should be obvious to most people .

Ducimus · 03-08-12, 12:49 PM

news link?

edit:
Regardless if China is acting as Skybird says, this commentary comes to mind:
http://globalpublicsquare.blogs.cnn....ew-world-mitt/

Stealhead · 03-08-12, 01:21 PM

I can certainly agree with Zakaria what we are seeing is other nations rise it does not signal our (the United States) down fall just that the rules are changing.

Ducimus · 03-08-12, 01:49 PM

Quote:

Originally Posted by Stealhead

I can certainly agree with Zakaria what we are seeing is other nations rise it does not signal our (the United States) down fall just that the rules are changing.

I do like his commentaries, he presents facts and logical thinking. Although in many of his commentaries, i think its obvious he favors Obama and the Democratic party. Im fine with that because he doesn't seem to be above critizing them as well.

Back on topic, here's one he made about China a few days ago. If he's correct, China definatly needs to do something. Which maybe leads into what Skybird was saying?

http://globalpublicsquare.blogs.cnn....-a-speed-bump/

the_tyrant · 03-08-12, 01:22 PM

No matter what Skybird thinks about the euro, I genuinely believe that it is a good concept.

I bounce around the world a lot, and I absolutely HATE currency conversion.

I would certainly love a one world currency

03-08-12, 08:33 AM	#1
Skybird Soaring Join Date: Sep 2001 Location: the mental asylum named Germany Posts: 42,657 Downloads: 10 Uploads: 0	Chinese Yuan prepares big slam against the dollar In Decembre, China and Japan had agreed a treaty that installed the Yuan as official payment currency of equal status for the mutual trade between both countries. The dollar'S status got under pressure, loosing market shares in Asia. I now read in German news that negotiations between China, India, Brazil, Russia and South Africa have succeeded and that from end of March on China will offer credits in Chinese currency. At the same time, and since quite some longer time already, China has been busy with silenty shifting its currency reserves in dollars, replacing dollars with other currencies, or making a hay-day from the European misery and using the money of these dollar-reserves in shopping tours amongst European top-companies. Having the Yuan being established as an equal trade currency beside the dollar and Yen in trading with Japan, and even more important: establishing the Yuan now the the credit currency with the BRISC countries, has strong consequences that are easy to be underestimated, but i fact are not. I read that the bank HSBC calculates that the share of the Yuan in financial transactions on all Asian markets would rocket from currently 13% (in Asia) to over 50% in 2015. Globally, the dollar currently plays a role in around 85% of all fincial transactions. With the Asian market turning from US to Chinese currency, this unavoidably causes a blow, and the psychological signal will also add to the overall effect. Many people in Brussel and even more in Washington will hope and pray that the treaty will collapse in the very last minute. The only reply possible for both would be to just print more money that is not covered by a similiar grow in real assets and materiual values of Wetsern economies. What that means for Euro and dollar, is clear: massive devaluation, and an increase in debt burdens. It is this devluation of the dollar that has made China starting to react poissibly earlier than planned and getting ready to take over the global role of premier currency from the dollar, and reducing China'S immense rerseves in (increasingly worthless) dollars. The policy of the US has costed them many hundreds of billions in recent years, in other words the US actively destroys Chinese wealth. Washington certainly did not seriously expect that it would go like this endlessly, forever. I think the dominance of the Yuan as the world's lead currency will have been established much sooner than I and we have expected just some years ago. The Euro crisis and the American debt crisis forces them to push the pedal earlier than they had wanted. And no, I do not think they will stop the massive regulation of their currency anytime soon. They would be stupid if they did. after all, what America and Europe do, is massive currency regulation at the cost of the others, too. One has set the precedent to which the Chinese now can refer. Maybe not that clever a move by us, then. __________________ If you feel nuts, consult an expert.

03-08-12, 01:22 PM	#7
the_tyrant Admiral Join Date: Jun 2010 Location: Canada Posts: 2,272 Downloads: 58 Uploads: 0	No matter what Skybird thinks about the euro, I genuinely believe that it is a good concept. I bounce around the world a lot, and I absolutely HATE currency conversion. I would certainly love a one world currency __________________ My own open source project on Sourceforge OTP.net KGB grade encryption for the rest of us

03-08-12, 10:25 AM	#2
Catfish Dipped Squirrel Operative Join Date: Sep 2001 Location: ..where the ocean meets the sky Posts: 17,771 Downloads: 38 Uploads: 0	Which of course was the reason for the other wars in the mid-east. The US economy cannot afford to let oil not being sold in Dollar currency. Only this time, China is not a small fish ..

03-08-12, 10:34 AM	#3
Stealhead Navy Seal Join Date: Feb 2009 Location: Kentucky Posts: 5,421 Downloads: 85 Uploads: 0	Once it was said that sun never sets on the British Empire less than 100 years later it most certainly does.No one nation is the biggest kid on the street forever.We are currently in a transition point it should be obvious to most people .

03-08-12, 12:49 PM	#4
Ducimus Rear Admiral Join Date: May 2005 Posts: 12,987 Downloads: 67 Uploads: 2	news link? edit: Regardless if China is acting as Skybird says, this commentary comes to mind: http://globalpublicsquare.blogs.cnn....ew-world-mitt/

03-08-12, 01:21 PM	#5
Stealhead Navy Seal Join Date: Feb 2009 Location: Kentucky Posts: 5,421 Downloads: 85 Uploads: 0	I can certainly agree with Zakaria what we are seeing is other nations rise it does not signal our (the United States) down fall just that the rules are changing.