China nukes the $

[jk]

Re: China nukes the $

China would simply be replacing one fiat currency with another fiat currency. When the IMF sells its gold holdings, what will back its special drawings rights? And if China exchanges dollars for the IMF currency, wouldn't the IMF currency be equivalent to dollars?

the imf will issue sdr's = special drawing rights, which are priced as a basket of various currencies, including dollars. but it only includes dollars, as opposed to being 100% dollars, so it provides a way for them to further diversify away from the dollar.

[rj1]

Re: China nukes the $

I guess I'll come in and be the voice of reason.

"Reiterating a call for a new world currency" means two things. One, that the first time it was stated didn't result in anything, and two, that it does not mean they have actually done it.

How is China going to get its new world currency? Isn't that the quandry that all the dollar-holding states find themselves in? A kind of international central bank version of "too big to fail"?

[rj1]

Re: China nukes the $

I guess I'll come in and be the voice of reason.

"Reiterating a call for a new world currency" means two things. One, that the first time it was stated didn't result in anything, and two, that it does not mean they have actually done it.

How is China going to get its new world currency? Isn't that the quandry that all the dollar-holding states find themselves in? A kind of international central bank version of "too big to fail"?

http://www.cnbc.com/id/31600755

China and Brazil are working on a currency arrangement to allow exporters and importers to settle deals in their local currencies, bypassing the U.S. dollar, the countries' central banks said on Sunday.

This is not nuking. More like a forward advance of a pawn.

[medved]

Re: China nukes the $

This is not nuking. More like a forward advance of a pawn.

Exactly. All this talk about nuking is silly. China still needs the US, it just wants more influence for themselves and less for the US. Also, they are not that scared of growth of the US gov't debt, because the gov't is now a much bigger organization with more assets and more control. And over the 8 years of Obama rule it will get more powerful yet. So what if it doubled the size of debt? Its own size will more than double pretty soon.

Also, there is no ideological disagreement between China and US, that most of the economy should be run by the gov't. There is only jockeying for a better position and more influence within an existing framework. This is not what nuking is made of.

[D-Mack]

Re: China nukes the $

Dollar Falls Most in Month as China Urges New Reserve Currency

By Oliver Biggadike and Ye Xie

June 27 (Bloomberg) -- The dollar declined the most against the euro in a month and dropped versus the yen after China repeated its call for a new global currency.

http://www.bloomberg.com/apps/news?p...d=aQ.zWVPnOYYg

Dollar Rises as China Says No Sudden Change in Reserve Policy


By Yoshiaki Nohara and Ron Harui


June 29 (Bloomberg) -- The dollar rose for the first time in three days against the euro after China said it won’t alter its foreign-currency reserves suddenly, easing concern overseas investors will shift away from the greenback.

The dollar gained versus 14 of the 16 major currencies after China’s central bank Governor Zhou Xiaochuan told reporters in Basel, Switzerland, yesterday that the nation’s “foreign exchange reserve policy is always quite stable.” The yen fell after a Japanese report showed retail sales declined for a ninth month, reducing the appeal of the currency as a refuge from the global slump.

..
http://www.bloomberg.com/apps/news?p...d=aNHdBbZ5fvAU

Looks more like trying to pull the table cloth while keeping the stuff on it.