RE: Can China Dethrone US$ as Global Reserve Currency? ~ Steve Brown … (Death of the Dollar–34) with Link to Full Story
Dear @majes.tytyty
Perhaps year ago China could make it happen. However in current days they seem to have lost most of trust towards them. I cannot think of one developed country, which would have any trust in Chinese currency as a stable currency.
Not to mention, that when it comes to world trade - then very small % (something around 1%) is done in their currency.
Chinese lack of financial transparency is going to be a huge problem. According to my knowledge, their financial and banking system is currently going through very difficult time. Appartently bank runs are happening very often. But noone knows for sure. Why? Because of total lack of transparency. Which is going to build distrust.
FED and european central banks may have their own flaws, however they provide loads of data. Comparing to "ZERO" data coming from china.
Also 2 things we need to remember:
- oil trade is and will continue to be in USD (as long as US military won't be challenged by Chinese military)
- loans and credits need to be paid. And majority of it (including morgages) around the world are in ... USD. That will create demand for upcoming several years to come.
That's how I see things at the moment.
Yours, Piotr
Good point about the transparency. That's also true about the amount of gold that China holds – as opposed to the amount that it claims to hold.
It claims to have only about 2000 tons of gold. But most people believe that it actually has multiples of that, maybe as much as 8000 tons.
For over a decade now, China has been buying more and more gold. But its officially reported holdings have not increased. The simply math indicates that they're not being honest or transparent about it.