Stories about the imminent replacement of the USD as the global reserve currency abound. In some circles it is the consensus reality. Martin Armstrong sets a questioner straight.
China is on the rise and it will become the financial capital of the world after 2032. However, it has a long way to go. China can price every commodity in yuan and demand all trade deals are in yuan. That still will not displace the dollar. The center core issue behind the dollar ironically in the US National Debt. For now, this is the place institutions can park their money. You can trade in any currency, but where do you park your profits?
China will displace the USA as the financial capital of the world when (1) people begin to trust China as a place to park money.
Martin Armstrong provides a good answer but surprisingly omits mention that the People's Bank of China still pegs it currency to the American dollar.
Wake me up when China drops the peg.
Armstrong Economics
Will China take over US as the top Superpower
Martin Armstrong
10 comments:
They said do us that it was time to move beyond manufacturing and to become a service economy now. We all thought servants, jobs like that, but they said no, advanced jobs in software design and serving high finance. They said we were moving on from the industrial revolution leaving that to the third world.
We still weren't convinced but they said most children were now going to leave school and go to universities to get good degrees because all the best jobs were going in software design, advertising, the arts, lawyers, solicitors, banking, etc.
The trade unionists still weren't convince and now look at us, mcjobs, a wrecked economy always in recession, never ending austerity, and China zooming ahead as the manufacturing giant now developing super advanced space aged technology to take mankind into a brave new future.
The One Percent conned us and made a packet out of it but as they own the media they can still get the majority of the electorate to vote for more of the same, because, you see, we are still living beyond our means and haven't made enough cut backs yet.
Oh. I almost forgot about Armstrong; it's been a few years. Btw, when did he get out of prison? :)
China is only ascendant it until the US nukes it into oblivion. What other possible way do we have to compete?
Armstrong did 11 years for fraud - a Ponzi scheme.
A growing middle class in China is likely to give rise to domestic aspirations for democratic self rule as people want to have more say in their affairs. In this context, the democratic impulse is will probably spread from Taiwan and Hong Kong to mainland China. In this context, the US should have fundamentally no more to fear from the emergence of China than it does from India.
"give rise to domestic aspirations for democratic self rule as people want to have more say in their affairs." = bullish Yuan...
A growing middle class in the Middle East is likely to give rise to domestic aspirations for democratic self rule as people want to have more say in their affairs. In this context, the democratic impulse is will probably spread from Iran and Syria to Saudi Arabia and other Middle Eastern monarchies and emirates. In this context, the US should have fundamentally no more to fear from the emergence of radical Islam than it does from India.
Perhaps China doesn't want other people to 'park their money' in Yuan. That way it doesn't have to fall into the trap of paying foreigners.
Perhaps China is a bunch of USD zombies....
Perhaps China doesn't want other people to 'park their money' in Yuan. That way it doesn't have to fall into the trap of paying foreigners.
As I read their intentions, the Chinese leaders want a multipolar world with a new monetary system based on a supranational unit of account to replace the Bretton Woods system and its modifications that is based on the USD, like the bancor system Keynes proposed at the time of Bretton Woods but which was rejected. (Incidentally, there is a new cryptocurrency called "bancor".)
This is probably just a matter of time in coming unless the US can subdue Russia and China and assert permanent global hegemony that imposes unipolarity militarily. This is the key global dynamic going on now. The major geopolitical and geostrategic focus is on preparing for this confrontation of policies and wills. The positive side is that some amazing technology will come of it that will influence everything else. If we don't destroy ourselves, that is.
Post a Comment