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Author Topic: New Reserve Currency of The World  (Read 1750 times)
Hazir
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September 14, 2015, 07:20:34 PM
 #21

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The U.S. owes almost US$3 trillion to just Japan and China alone as it prints about US$696 million per day. According to the International Monetary Fund (IMF) or the world’s loan shark, China has even passed the U.S. as the world’s largest economy.

What I don't understand is why does the US own Japan and china so much? Why do they even need to borrow so much money when they can just print their own not to mention why would they want to be in so much debt that they can't ever really repay?
That is how the system works, everybody is indebted to someone. People will blame stagnated wages, inflation, banks, probably even the direction the wind blows on any given day, however the answer is pretty simple. The main reason the American government is so heavily in debt is overspending.

Will they ever repay? No.


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September 14, 2015, 10:46:28 PM
 #22


 China is not failing,learn before you post.You can start small business in China,make money and you dont need even to register,untill some ammount money earned, husbend and wife is doing business together that earned money double

Dont Joke,maybe China GDP will be 6% or 5% and so what,westerness economys can only dream about
China has about 6% rates,maybe USA  will start currency war
What is USA debt
more QE,only corporations what are creating schemes

And read,nobody like USA,Chinse,people in South Africa,Asia and arabic countrys and european also

Already Germany and UK are trading with China in Yuan,limited trading but if Yuan will exchangable ,thay will trade more

Chinise are rebuilding Silk Road,through Iran,Iraq,Afghanistan straight to Europe,you think thay will trade in green debt,forgot

China is building new Panama channel


BobK71
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September 17, 2015, 02:39:09 AM
 #23

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The U.S. owes almost US$3 trillion to just Japan and China alone as it prints about US$696 million per day. According to the International Monetary Fund (IMF) or the world’s loan shark, China has even passed the U.S. as the world’s largest economy.

What I don't understand is why does the US own Japan and china so much? Why do they even need to borrow so much money when they can just print their own not to mention why would they want to be in so much debt that they can't ever really repay?

The reserve currency country *must* keep accumulating debt, under the modern world system.  This also eventually dooms the country to decline, even if no one can tell exactly when or how.  That is also in the cards of the system.

The technical reason why Japan and China (and Western Europeans before them, and other developing countries after them) own so many Treasuries and Freddies/Fannies is that they intervened to keep their currencies artificially cheap against the dollar, to boost their exports.  The mechanics of this intervention required them to buy dollars with printed yuan, yen, West German marks, etc.   This trade surplus helped the countries and governments in multiple ways, and this process also built up (still trusted) dollar reserves which strengthened their defence against financial crises.

Whether these governments choose to buy interest-bearing Treasuries or fill warehouses with dollar cash, what they own is ultimately US debt.  (Cash is debt in the sense that it's a promise to be redeemed by goods and services -- the ultimate source of the value of money -- if no longer by gold.)

When there're so many people happy to give Americans real goods and services in exchange for promisory notes, you can't be surprised if the country's elites issue a few more of them than would be prudent.

At a more philosophical level, the reserve currency issuer is the manufacturer of the world's money.  It must supply enough money to the world (and the only way to do this is being more and more indebted to the rest of the world, as above) or the world would find some other reserve currency issuer.  (See Triffin's Dilemma -- even though it technically applied only to the postwar dollar-gold standard, the basic idea is the same today, as mentioned above.)

In the event, the US "bravely" stepped up to become the world's consumer of last resort.  If this cooks the country long-term (since eventually people will stop trusting the currency, as happened to the Netherlands, Britain, and indeed Rome,) that's not the immediate concern of the elites.  And other countries being exploited by the US in the short term is also not a concern of their elites -- and indeed this seems to keep those elites in power.

There is a third way.  If the reserve currency country refuses to play with the financial pollution of the world, it could have itself a healthy economy and society, if not a globally dominant power.  But this would require adopting state-free money, and, unfortunately, the right trade barriers to prevent one's strong money from pricing oneself out of global markets and thus losing money to the rest of the world via current account deficits.  Most importantly, in a democracy, it would require a mass awakening.
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September 17, 2015, 03:13:36 AM
 #24

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The U.S. owes almost US$3 trillion to just Japan and China alone as it prints about US$696 million per day. According to the International Monetary Fund (IMF) or the world’s loan shark, China has even passed the U.S. as the world’s largest economy.

What I don't understand is why does the US own Japan and china so much? Why do they even need to borrow so much money when they can just print their own not to mention why would they want to be in so much debt that they can't ever really repay?

As regards to why not print rather than borrow money, the answer is that the US (wisely) prefers it that way, and pays enough interest on the debt to entice foreigners to buy debt.

Even with fiat money, debt is still one step removed from cash (ie less safe.)  In a crisis, the US could decide to "honor" its debt by printing money to redeem it, or to abandon debt but protect cash, the core source of power of its elites.

This both gives the US more options at that (unavoidable) future moment, and slows down the financial pollution at present (since having to borrow money and pay interest slows down government profligacy and financial asset creation, as compared to printing money outright.)
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September 17, 2015, 10:31:06 AM
 #25

May be now a days bitcoin seems a reserve currency. But very soon it would become a mainstream currency of world just because of it's border-less nature....
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September 17, 2015, 10:39:53 AM
 #26

Like European union counties accepted a common currency, the world would accept a common currency one day. That currency is bitcoin.

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