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Page added on February 4, 2013
IMF Confirms Chinese Yuan/Renminbi Set to Become a Global Reserve Currency
The IMF has confirmed the Yuan/Renminbi is set to become a Global Reserve Currency at an Economic Forum in Hong Kong.
With China’s economy gaining global strength, the renminbi is set to become a global reserve currency, Zhu Min, deputy managing director of the International Monetary Fund, said Tuesday at an economic forum in Hong Kong.
Yesterday I wrote about the crossborder loans China was doing, before the Yuan becomes a Reserve Currency, their saying the “unloved dollar’ and the amount of gold they are importing. Besides the rumors of them backing their currency by gold.
David Morgan of the Morgan Report and Silver-Investor.com did an interview with me about the subject, Germany’s gold and the Silver shortage/manipulation.
David mentioned that things take time to happen and as I add on the third part of the interview is that it already has been years and maybe the situation will start going faster.
It seems to me with the Yuan being called a Global Reserve currency now even by China itself, they have laid out the ground work for changes to be made in a short amount of time. China does not reveal their hand until everything is already said and done. Considering the dollar has been the only “Global Reserve” currency for decades but this month the Yuan is becoming attached with that name.
The dollar demise has been talked about for years now. Many had been saying “anytime” but it has been long and drawn out. China is very smart as they take their time and put everything in place before they reveal or make their big moves. Has the time now come?
The Premier of China had gone to Saudi Arabi and Dubai a year ago. He stayed a week there having meetings and making agreements.
Premier Wen Jiabao and the ruler of Sharjah, Sultan bin Mohammed al-Qassimi,attend the Arab-China Business Conference in the Gulf emirate on Wednesday. [Photo / AFP]
SHARJAH, UAE –
China signed economic and trade agreements worth 100 billion yuan ($16billion) with Saudi Arabia
and the United Arab Emirates (UAE) as Premier Wen Jiabao wrapped up a six-day visit to the Middle East on Thursday.
The first currency swap agreement with Arab nations, worth 35 billion yuan, was also signed inAbu Dhabi, Wen told the Fourth
Arab-China Business Conference in Sharjah on Wednesday.
Are those agreements now coming into fruition? Is Saudi Arabi ready to be one of the last Middle Eastern countries to trade in something other than the “Petrol Dollar?” If Saudi Arabia begins oil trade in something other than the dollar, then it really is game over for the dollar as the Global Reserve Currency and any strength it now has. It only has strength because all of the other countries are devaluing their currencies against the dollar for trade. With the Fed printing the dollar non-stop, currency wars are raging, no one wants to have the strong currency due to trade and their products being un-affordable to other countries.
But once the dollar is no longer a worry or concern for trade then all the other countries will be able to stop their currency devaluations against the dollar because a new Global Currency backed by Gold will be the hero of the world. The only country that will be left all to itself with their inflating currency will be the United States.
It seems the proximity of this occurrence is now much closer with both the IMF and China itself using the words “Global Reserve Currency” for the Yuan.
4 Comments on "IMF Confirms Chinese Yuan/Renminbi Set to Become a Global Reserve Currency"
Arthur on Mon, 4th Feb 2013 1:28 pm
http://en.wikipedia.org/wiki/Reserve_currency
The concept of reserve currency is a thing of the past, from Bretton Woods in particular. After Roosevelt America and the USSR managed to destroy Europe in a deliberate preconceived action, the US could dictate its conditions on the vanquished European nations, to the tune that the dollar would be the currency of international trade, giving the US the huge advantage of creating the dollar in quantities at will, out of thin air, uncontrolled by the others, resulting in that gigantic free lunch, aka American Dream. It was very good as long as it lasted, well for Americans that is, giving Americans reason to believe in ‘exceptionalism’, Greates Country on Earth, leading to a perceived duty to ‘police the world’, a thinly veiled intention to rule the world.
Back to the Chinese. Not sure what they mean with their currency going to be a reserve currency, but I think they are dreaming if they think they can replace the dollar with the yuan, backed by their 7T economy, versus EU 18T and US 15T.
The role of the dollar as reserve currency is on its last legs, that is true and is going to crash, simply because too many of them are printed. Fiscal structural deficite 7T, which is insane.
After the crash, meaning after all major parties will try to sell off their dollar reserves at ‘pennies on the dollar’, international trade, if any, will be conducted on the basis of real values only. That means either barter or gold/silver, not fiat money. The US will probably be largely forced to isolationalism, as the large structural trade deficits of the past and present show that the US has not enough to offer in terms of real trade values. Obviously the US will be tempted to use its military to go and get it for free, first of all oil.
Arthur on Mon, 4th Feb 2013 2:14 pm
The very fact that the US holds the largest gold reserves AND that they store most gold of western European nations (something to do with fear of USSR overrunning Europe) AND have agreed to repatriate the gold to Europe… in SEVEN YEARS time, shows that the US itself does believe that a crash is going to happen in less than seven years from now. At least the US will have an excellent financial position in a world financial system, if any, based on gold.
Come to think of it, it could very well be that US ruling circles are setting course on a world war and do not care about the sustainability of the dollar as a (reserve) currency by deliberate inflating the dollar at excessive rates, forcing Chinese and other parties to ‘initiate hostilities’ by dumping the dollar, which will be sold by the government as an hostile action, asking for retalliation.
DC on Mon, 4th Feb 2013 5:02 pm
Arthur, you first comment describes 1990! That was exactly what the US was after in the 1st Gulf War as well. One of the real targets of that war, was not Saddam Hussein, but the EU itself. Hell, the US even managed to convince the EU to pony up some token troops and money to help fund the US effort to weaken the EU. Now the US virtually runs the EU’s foreign policy, created a huge crises for the EU(Gold-man Sachs, PIGS) and old-fashioned imperialism and gun-boat diplomacy are back in style, ala France, UK especially.
But to your main point, I dont see China taking over just because the US dollar is cratering. China just got lucky, there own internal economy and business model are more or less identical to those of the US corporate one. How can they not be? All that ‘made-in-China’ stuff is being made for US corporations. A fact the average under-employed North American seems to forget\ignore. China’s emulation of the corporate growth model has meant the dirtiest cities on Earth, probably worse than Victorian England, and a surging population that has to contend with an environment on the knifes edge. The pollution in China is not a trivial matter, it is already imposing huge indirect costs, and mitigating them could literally bankrupt China. Hardly seems to me a country poised to take over for the brutal and failing US empire does it?
BillT on Tue, 5th Feb 2013 1:37 am
DC, the China you see today is the US of the 50s. Pollution was killing Americans in large numbers then and still is but now it is fraking and suicide. I have no doubts that China can replace the dollar soon. The dollar is at Charmin level in value. In fact, Charmin might be more valuable in some situations. After all, China is now Saudi Arabia’s biggest oil customer, not the US. China has trade in mast countries of the world, where the Us doesn’t. China has non-dollar trade agreements with most of these countries. Your Western beliefs are out of date and no longer relevant.