will china grow by letting the dollar fall?

[c1ue]

Re: will china grow by letting the dollar fall?

Go to any market in any third-world country [thre's plenty of them all round the planet] and try to buy something with Euro cash. Then pull out some American Dollars.

I realize that what happens in village markets and city bazaars in developing countries can't compete with the importance of Goldman's prop desk or the halls of commerce in Europe, but until I see a repudiation of the US Dollar by the grass roots, imo stories of its imminent total demise are overblown...

You might be surprised how quickly these 'grass roots' switch.

I noticed 5 years ago that the Ebay auctions selling stuff out of China had switched from dollars to GBP. Now its Euro.

In Russia people aren't putting savings in dollars anymore, it is euros.

The Japanese I know who have accounts outside of Japan are in Euro already.

In the internet/mobile era - the switchover is probably a lot faster than anyone might think.

Secondly, once it starts it won't reverse without major US policy changes.

A loss of trust in a reserve currency is a lasting event.

[touchring]

Re: will china grow by letting the dollar fall?

You might be surprised how quickly these 'grass roots' switch.

Businesses are forced to change to a more stable currency. Having to change the price list every 2 months is no fun. It is additional work and makes the customer angry.

Secondly, once it starts it won't reverse without major US policy changes.

After changing the price list and IT systems to use another currency (which could cost hundreds of thousands for a big company and probably millions for a global company), there must be a really good reason to switch back.