Yuan To Win Reserve-Currency Status

[Pab]

I think it is a reason of btc price increase,but nobody will tel that loudly.Event has been postponed from October to November

China’s goal to attain endorsement of the yuan as a reserve currency will be achieved this year, according to most economists surveyed by Bloomberg.

If Chinise Yuan will be recognised likea global currency together with dollar,euro,yen,than market will choose currency to trade,and it will be free to choose for countrys in which currency thay thay want to keep his reserve

Big trouble for dollar domination,if USA will put his veto,than we can expect China answer,yet another big trouble

All that is  enough to drive btc price up

http://www.bloomberg.com/news/articles/2015-06-26/china-seen-winning-reserve-currency-endorsement-in-imf-s-review

[markj113]

About time too.

Why should the US hold reserve currency status and China not when the US owes China a few trillion $

[isvicre]

Interesting situation. But will yuan's value rise after that? Lots of people who does businesses with china will start holding yuan I guess.

[Digit-0]

About time too.

Why should the US hold reserve currency status and China not when the US owes China a few trillion $

Interesting question, maybe that exactly why china is thinking that they can do it?

I start to believe that we are in a new age ( i mean talking about china ) just look on this news for example, or look at their avoiled law about unique childrens, now they allow more than 1 children per couple.

Looking at chinese bitcoin exchanges made me think that the machine already started, 3 millions trading volume on chinese exchanges made me  think that  they are growing in "many ways".

[EggShells]

Remember this is just a prediction.  I have a hard time believing that, even if the IMF decides for whatever reason to add the yuan into its Special Drawing Rights basket (thus making it "officially" a reserve currency,) this will be anything close to earth shattering, on the ground.

Investor trust is the real criterion.  If you think the US has printed and borrowed too much money, you haven't seen China.  The huge pile of official dollar reserves is impressive, but all those dollars are backing yuans already issued, much of it at a much higher rate of yuans per dollar than today.  The economy is simply flooded with money and debt.  (There is a reason Chinese citizens like gold and Bitcoin!)

It's true that a lot of this capital is controlled by the state, so capital flight can be controlled more easily.  But that's also part of the problem, since state capital tends to slow down growth, and growth is the only thing that can really cure financial pollution.

People like the greenback, sterling, euro and yen because they can get out of them easily.  For this reason the issuers of these currencies also tend to be careful not to create too much money and debt.  (The financial pollution is evident only looking across decades.)  Yuan transactions are under all kinds of state control, and there's no telling when the Chinese Communist Party will decide to issue a massive amount of assets to save its own skin.

Ultimately, finance and money are a highly political issue, despite all the economic spin that the elites put out to justify this or that action.  The yuan's problem is that it's dictatorship money.

[Pab]

Remember this is just a prediction.  I have a hard time believing that, even if the IMF decides for whatever reason to add the yuan into its Special Drawing Rights basket (thus making it "officially" a reserve currency,) this will be anything close to earth shattering, on the ground.

Investor trust is the real criterion.  If you think the US has printed and borrowed too much money, you haven't seen China.  The huge pile of official dollar reserves is impressive, but all those dollars are backing yuans already issued, much of it at a much higher rate of yuans per dollar than today.  The economy is simply flooded with money and debt.  (There is a reason Chinese citizens like gold and Bitcoin!)

It's true that a lot of this capital is controlled by the state, so capital flight can be controlled more easily.  But that's also part of the problem, since state capital tends to slow down growth, and growth is the only thing that can really cure financial pollution.

People like the greenback, sterling, euro and yen because they can get out of them easily.  For this reason the issuers of these currencies also tend to be careful not to create too much money and debt.  (The financial pollution is evident only looking across decades.)  Yuan transactions are under all kinds of state control, and there's no telling when the Chinese Communist Party will decide to issue a massive amount of assets to save its own skin.

Ultimately, finance and money are a highly political issue, despite all the economic spin that the elites put out to justify this or that action.  The yuan's problem is that it's dictatorship money.

Very good post,money in modern world is political weapon,but issueres ofcurrencysarecreating unlimited debt.Now Draghi will rise his his QE over 60 bln euro per month,why he is saying becouse of inflation andsituation in China,dollar is printed otherwisewill be not possible to cover USA debt,

The yuan's problem is that it's dictatorship money.What else isdollarand Euro,Euro is political project weapon in Germany hands,thanksEuro Germany is ownng Europewithout one shoot

[BobK71]

Very good post,money in modern world is political weapon,but issueres ofcurrencysarecreating unlimited debt.Now Draghi will rise his his QE over 60 bln euro per month,why he is saying becouse of inflation andsituation in China,dollar is printed otherwisewill be not possible to cover USA debt,

The yuan's problem is that it's dictatorship money.What else isdollarand Euro,Euro is political project weapon in Germany hands,thanksEuro Germany is ownng Europewithout one shoot

Certainly Germany is enjoying hegemony in Europe as it's both the biggest creditor country and the biggest voice in the ECB.  Between the US and China, there is a little balanace of power -- the US has more power but China is the creditor.  There's no such balance between Germany and Greece.

When currency and debt crash, democracies tend to like to use inflation and devaluation, among all the policy choices.  Savers can hedge against this by buying things like gold, Bitcoin and foreign currency.  Undemocratic countries tend to like financial repression, which is even less predictable than inflation and devaluation.  Not that financial repression isn't done in the West, but they tend to be milder.

[yurinov]

yes some big chinese investment has hit bitcoin lately, i think this is why the price increase.

[n2004al]

I think it is a reason of btc price increase,but nobody will tel that loudly.Event has been postponed from October to November

China’s goal to attain endorsement of the yuan as a reserve currency will be achieved this year, according to most economists surveyed by Bloomberg.

If Chinise Yuan will be recognised likea global currency together with dollar,euro,yen,than market will choose currency to trade,and it will be free to choose for countrys in which currency thay thay want to keep his reserve

Big trouble for dollar domination,if USA will put his veto,than we can expect China answer,yet another big trouble

All that is  enough to drive btc price up

http://www.bloomberg.com/news/articles/2015-06-26/china-seen-winning-reserve-currency-endorsement-in-imf-s-review

I don't think that USA will put the veto. USA has chosen the way to collaborate with China and not to fight with it. They have and will have various divergences but the trend is the collaboration. At least in appearance. So I don't see a possible conflict in this direction.

But there exist even another reason who make me to believe the above. USA have actually the supremacy in the monetary world through its currency (us dollar). I don't think that the Chinese yuan (even the China is very aggressive in this direction) will be able to replace the us dollar. At least for to many years to come. Maybe can be verified some decrease or maybe even replacement of us dollar reserves only in few countries (satellite of China which maybe have made this already) which are without big weight in the world monetary scene.

Anyhow my personal think is that every country must have "fear" from China. Seeing its development, its policies of development and the way they arrived and managed this development in the last 30-40 years can be told for sure that for China everything is possible.

[Amph]

yes some big chinese investment has hit bitcoin lately, i think this is why the price increase.

this explain it well to me full of details http://www.zerohedge.com/news/2015-11-02/reason-bitcoins-recent-surge-revealed

[Mickeyb]

I think it is a reason of btc price increase,but nobody will tel that loudly.Event has been postponed from October to November

China’s goal to attain endorsement of the yuan as a reserve currency will be achieved this year, according to most economists surveyed by Bloomberg.

If Chinise Yuan will be recognised likea global currency together with dollar,euro,yen,than market will choose currency to trade,and it will be free to choose for countrys in which currency thay thay want to keep his reserve

Big trouble for dollar domination,if USA will put his veto,than we can expect China answer,yet another big trouble

All that is  enough to drive btc price up

http://www.bloomberg.com/news/articles/2015-06-26/china-seen-winning-reserve-currency-endorsement-in-imf-s-review

Well if this really happens, America will have new reason to start a new war. You are aware that the current American debt system is sustainable only because they are a world's reserve currency?!

[zenitzz]

So China's wealth, production monopoly, mineral rights monopoly, Mt. Everest-like gold holdings, land rights, U.S. debt holdings and super nova economy...just cant compare to the U.S.?

[countryfree]

I think it is a reason of btc price increase,but nobody will tel that loudly

No, I don't see a relation between the Yuan and BTC, but I believe the Yuan could become reserve currency status, if China would allow it. It's not possible at this time because it's not fully convertible.

Investor trust is the real criterion.  If you think the US has printed and borrowed too much money, you haven't seen China.  The huge pile of official dollar reserves is impressive, but all those dollars are backing yuans already issued, much of it at a much higher rate of yuans per dollar than today.  The economy is simply flooded with money and debt.  (There is a reason Chinese citizens like gold and Bitcoin!)

It's true that a lot of this capital is controlled by the state, so capital flight can be controlled more easily.  But that's also part of the problem, since state capital tends to slow down growth, and growth is the only thing that can really cure financial pollution.

People like the greenback, sterling, euro and yen because they can get out of them easily.  For this reason the issuers of these currencies also tend to be careful not to create too much money and debt.  (The financial pollution is evident only looking across decades.)  Yuan transactions are under all kinds of state control, and there's no telling when the Chinese Communist Party will decide to issue a massive amount of assets to save its own skin.

Ultimately, finance and money are a highly political issue, despite all the economic spin that the elites put out to justify this or that action.  The yuan's problem is that it's dictatorship money.

This is quite correct, but you forgot one thing: there's no large bills in Chinese currency. The Yuan would gain hugely if China could introduce 1,000 and 2,000 Yuan bills. It matters. Many people (like me) love to have banknotes which are worth a lot in their pockets. It just means the country is rich, some people need large bills.