re <<perhaps china would do us a big giant favor, and pull the rug out from the printing monsters>>
small progress made since about 36 months ago, able to pay Yuan in supermarkets, and soon enough, the world becomes the supermarket
warning: chinese invented paper, ink, printing press, paper money, money transfer, banking
just in in-tray
The new new money
ClubOrlov -- Sunday, May 10, 2009
cluborlov.blogspot.com
It's official: The government in Beijing has announced that the Yuan can now be used in international trade. Their mouthpiece for this occasion was the Industrial and Commercial Bank of China, a private entity, which made the announcement on their behalf. By the end of this year, it is expected that fully 50% of all transactions with Hong Kong will be denominated in the Yuan. In turn, Hong Kong re-exports 90% of its Chinese imports. Importer #1 is the European Union; importer #2 is the United States. Some of these countries may soon find themselves hard-pressed to earn enough Yuan to continue importing Chinese-made products.
This is only the next small step in Beijing's "policy of small steps." Already the Chinese government has ramped down its purchases of US Treasury paper, forcing the Federal Reserve to step in as the buyer of last resort. The IOU, with which the US has inundated the world, is now becoming the I-owe-me - which is not quite as impressive to those who are considering selling products to the US on credit. Instead of the funny paper, the Chinese government has started to buy up gold on the international market. The Yuan has long been in de facto use in Hong Kong, Sigapore, Kuala Lumpur, and other countries in the region, in preference to the US Dollar. In several countries it is already possible to have Yuan-denominated savings and checking accounts; in Hong Kong alone such accounts are set to exceed US$100 billion by the end of this year.
The United States and Europe have recently demonstrated their unwillingness to grant other countries a greater say in the IMF and the other organizations that govern international finance. Now Beijing can turn this combination of weakness and recalcitrance to its advantage, by quickly creating a wide coalition of countries that wish to isolate themselves from the financially untrustworthy regions of Europe and America. This is but one of many developments that those who are predicting economic recovery in the US sometime next year have chosen to ignore, but it may turn out to be one of the more important ones.
What do these major shifts in international finance portend for us mere private citizens? The implication is simple: if you think that you still have some money, let's hope that you don't mean that you have something or other denominated in the US Dollar. Or that you just wrote yourself an I-owe-me. |
