China positioning its currency for a run at world supremacy

[Bindare_Dundat]

Reporting from Shanghai -- Could the world's currency of choice have the face of Mao Tse-tung on it, not George Washington?

Quixotic or not, the Chinese are preparing for that day.

In a series of what might be called baby steps, Chinese officials recently have moved to globalize the yuan and promote its influence overseas, with Shanghai designated as command central.

Since last December, China has signed deals with six countries, including South Korea, Malaysia and most recently Argentina, for currency swaps that would inject Chinese money into foreign banking systems. That would allow foreign companies to pay for goods they import from China in yuan, bypassing the dollar -- the currency that dominates international trade and finance, including foreign exchange reserves.

Beijing is also taking initiatives to use the yuan, also known as the renminbi, to settle trade accounts between some Chinese provinces and neighboring states, starting with Hong Kong.


"The central bank has set promoting the renminbi for payment settlements as the main task for this year's work," said Shi Lei, an analyst in the global financial markets section at Bank of China in Beijing.

http://www.latimes.com/business/la-fi-yuan3-2009apr03,0,865582.story

[a_joker10]

Reporting from Shanghai -- Could the world's currency of choice have the face of Mao Tse-tung on it, not George Washington?

Quixotic or not, the Chinese are preparing for that day.

In a series of what might be called baby steps, Chinese officials recently have moved to globalize the yuan and promote its influence overseas, with Shanghai designated as command central.

Since last December, China has signed deals with six countries, including South Korea, Malaysia and most recently Argentina, for currency swaps that would inject Chinese money into foreign banking systems. That would allow foreign companies to pay for goods they import from China in yuan, bypassing the dollar -- the currency that dominates international trade and finance, including foreign exchange reserves.

Beijing is also taking initiatives to use the yuan, also known as the renminbi, to settle trade accounts between some Chinese provinces and neighboring states, starting with Hong Kong.


"The central bank has set promoting the renminbi for payment settlements as the main task for this year's work," said Shi Lei, an analyst in the global financial markets section at Bank of China in Beijing.

http://www.latimes.com/business/la-fi-yuan3-2009apr03,0,865582.story

When China deregulates its currency to float on its own.
Then we can see what happens.

The Chinese stock market and currency can't float on its own now. It uses the American currency to keep it in balance.

Obama should challenge china on this though.
Why peg your currency if you want to trade directly with other countries.

[George Whorewell]

Something else to consider-- If this plan were to succeed or a new global currency was established, China's investment in our debt would shrink dramatically in value. Already, China has lost a shitload of money but they still own something like 600 billion of our debt. Imagine how little their investment will be worth if this plan is executed.

I think its a bunch of hot air with no real possibility of happening on a large scale.

[240 is Back]

it's not gonna happen tomorrow.

A series of small moves like this - over ten years - is definitely something to worry about.

perhaps they're in the mindset of "take the hit, get as much value out of this debt as you can, and prepare your economy for the next 200 years".  I mean, if my deadbeat tenant owed me 6 months of rent, I'd likely work with him, getting as much rent $ as I can until I was in a position to evict and replace him.

[SAMSON123]

Something else to consider-- If this plan were to succeed or a new global currency was established, China's investment in our debt would shrink dramatically in value. Already, China has lost a shitload of money but they still own something like 600 billion of our debt. Imagine how little their investment will be worth if this plan is executed.

I think its a bunch of hot air with no real possibility of happening on a large scale.

Imagine the reality of america being isolated in the world when NO OTHER NATION ACCEPTS ITS FIAT MONEY ANYMORE, but rather goes for the Yuan or that basket of currencies that EXCLUDES the dollar. Thisi is coming a lot sooner than you think...

[SAMSON123]

it's not gonna happen tomorrow.

A series of small moves like this - over ten years - is definitely something to worry about.

perhaps they're in the mindset of "take the hit, get as much value out of this debt as you can, and prepare your economy for the next 200 years".  I mean, if my deadbeat tenant owed me 6 months of rent, I'd likely work with him, getting as much rent $ as I can until I was in a position to evict and replace him.

Ten years....more like months of not weeks until its FULL IMPLEMENTATION...

Who would have thought less than a year ago that the american economy would come to a practical stand still as it is now?....Things can happen alarmingly fast.

[George Whorewell]

Samson, sign off of get big and ask your trainer to pick the lice out of your fur.