China to challenge US dollar reserve currency status

[Tyler Durden]

China is actively taking steps to phase out the US dollar which will decrease volatility in oil and commodity prices and deride the ‘exorbitant privilege’ the USA commands as the issuer of the reserve currency at the centre of a post-war international financial architecture which is now failing.

In 1971, U.S. Treasury Secretary John Connally said, “It’s our currency and your problem”.

China is frustrated with what it sees as the US government’s mismanagement of the dollar, and is now actively promoting the cross-border use of its own currency, the yuan, or also called the renminbi, in trade and investment.

China’s goal is to decrease transactions costs for Chinese importers and exporters.

Zha Xiaogang, a researcher at the Shanghai Institutes for International Studies, said Beijing wants to see a better-balanced international monetary system consisting of at least the dollar, euro and yuan and perhaps other currencies such as the yen and the Indian rupee.

“The shortcomings of the current international monetary system pose a big threat to China’s economy,” he said. “With more alternatives, the margin for the U.S. would be greatly narrowed, which will certainly weaken the power basis of the U.S.”

Zha’s comments were highlighted at a seminar in Bahrain this week on the geopolitics of currencies organized by the International Institute for Strategic Studies, a London think tank.

http://www.prisonplanet.com/china-to-challenge-us-dollar-reserve-currency-status.html

Definitely explains why China is buying up all the gold (and refusing to disclose how much they have).

Do you think they will succeed?

 

[young-gun]

http://www.prisonplanet.com/china-to-challenge-us-dollar-reserve-currency-status.html

Definitely explains why China is buying up all the gold (and refusing to disclose how much they have).

Do you think they will succeed?

He who has the gold makes the rules. China is most definitely preparing for a return to the gold standard, or some form of it imo. Fiat currency has a 100% failure rate historically. The US has lasted longer than most. It wouldn't surprise me if they were trying to gain reserve currency status, but they are having problems of their own at the moment, ramping up their own stimulus and staring down the barrel of their own slowdown. Even if they didn't become the new reserve currency, there would be a huge shift of wealth if the US dollar was to become over-inflated and investors head to gold/silver. Reason being 1. china itself has been stocking up on gold like there is no tomorrow, and 2. they have also been encouraging the public to stock up as much as possible.

The yanks have been in a 4 decade long experiment since 1971, I'd say China see the end of the US$ is growing nearer. jmo.

 

[DB008]

https://www.aussiestockforums.com/forums/showthread.php?t=25025