Can China Dethrone US$ as Global Reserve Currency? ~ Steve Brown … (Death of the Dollar–34) with Link to Full Story
China would certainly gains some advantages from having the CNY become the world’s reserve currency.
Steve Brown –
"Can China Dethrone US$ as Global Reserve?"
(Right-click title to see original story)
(Image source)
– Flash Points –
1 – It will be hard for the yuan to displace the US$ as reserve currency.
2 – Any devaluation of the US$ or in US bonds would hurt China.
3 – The holder of the reserve currency has a great “privilege.”
– Synopsis –
For various reasons, it would be difficult for the CNY to replace the US dollar as the world’s reserve currency. But it would not be impossible.Don’t Dump Dollar Yet
China has several close ties to the US dollar. For one thing, the CNY is essentially pegged to the dollar. Also, China holds vast amounts of US treasuries.
Dethrone Dollar Now
The one option China has is to reveal its supposedly massive holdings of gold, and then partially back the yuan with gold. The yuan would appreciate considerably, and that strength could help it displace the dollar as reserve currency.In the late 1990s, the partially gold-backed Swiss franc became so strong that it almost overcame the dollar – until it threatened the Swiss chocolate and cheese merchants. The Swiss powers that be quickly reined in their franc. But that too had the inevitable negative effects.
– Insight from Outside –
Given the growth and strength of the Chinese economy, it’s very likely that the yuan will eventually displace the US dollar as the world’s reserve currency.
Advantage China
Holding the world’s reserve currency might have some drawbacks. But it certainly has its advantages. If the Chinese are having any concerns about their yuan dethroning the US dollar, all they have to do is consider the “exorbitant privilege” it bestows on the holder. (Image source)
Previous posts in this series – "Death of the Dollar, Posts 1–30" 
Hi @majes.tytyty
The reality of the world in the face of the dollar and a Chinese currency is complex.
The Chinese are currently not very well regarded, I think the pandemic has affected the global vision with respect to them and if I manage.
Of course, it is evident the scope they have, that is unquestionable, they are practically all over the world through their trade, their products.
When you think of a country that could have been established with great strength, the Asian giant comes to mind, however, for now there is still a way to go.
Certainly, they have a long way to go and there are many issues regarding the Asian giant. But the fact is that China still has plenty of growth ahead of it, while advanced countries such as Japan and the US are stagnant, with few prospects for sustained growth.
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:
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.
China now has a reputation that stinks with the aim of modernise slavery. If it were on the basis of economy and trade as well, china yuan would not still be used as a lot of countries are leaving for India. Moreover, the United States federal reserve Bank is operating democracy outside the US government but the Chinese central bank isn't the same. If US losses the spot of having the dollar as the reserve currency then euro takes over.
I cannot see how India, with its reprehensible caste system, would be in any way preferable to China.
Say what you will about China's autocratic leadership, but you cannot deny that it has lifted millions of people into the middle class. Granted, India has lifted many into a middle-class lifestyle, but percentage wise, far fewer than China.
As for the Fed "operating democracy outside the US govt," I can't agree with that. The US is now verifiably an oligarchy.
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Hello @shahzadalidogar
In every community you must read the rules very well before posting, usually have to enter the subject you can post, who are the moderators, administration, among other things.
In the case of Project.Hope the theme is as follows:
Thank you so Much Sir For Reply Me ..
Well, nowadays... I don't think China has all that power anymore (maybe in the near future). Bu we never know, right?
I am not an expert in this matter, but I think so the yuan replaces the dollar, the world economy is going to have to overcome a dramatic change, and I don't know if the world is ready for that, but in time we will know
We the People are ready to start Building our U.S. Circulating Sound Money, upon an Existing Foundation of Gold, Silver, Platinum and Palladium... We don't even need our Gold in Fort Knox... U.S. Electronic Sound Money is about to go Viral, all over the World...
July 17, 2020... 19.4 Hollywood Time...
China has advantages in the fields of digital payments and blockchain. Disregarding blockchain for a moment, digital payments in China are already advanced through the widespread use of Alipay and WeChat. Chinese people are already used to digital wallets whereas many people in the West are not. Later this year the DCEP, (Decentralized Electronic Payments, or China's answer to Libra) will probably be launched. Meanwhile the Libra project is stalling and showing little signs of progress. So a widely used digital yuan is likely to appear before a widely used digital dollar.