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> Despite talk of the yuan’s rise, the primacy of the greenback is unchallenged. And it is just that, talk. People forget, as the Yuan rises, so does the dolla
by mahranch 11y ago
> Despite talk of the yuan’s rise, the primacy of the greenback is unchallenged.
And it is just that, talk. People forget, as the Yuan rises, so does the dollar. The real question is, how much ground is the Yuan gaining on the dollar? And the answer? None. If anything, it's taken a couple steps back.
You see all these articles over the last few years about how the Yuan is starting to do well but for some reason, people think that the U.S dollar just stands still the entire time and is letting it catch up. It doesn't work like that. If the yuan was to ever replace the dollar, it would be several decades, likely much more, before it's even remotely close to replacing the dollar as the world's currency. If it happens, it almost certainly won't happen in your lifetime unless some asteroid drops of the sky, destroying most of the U.S.
Even in that unlikely event, they would still have to do something about their rampant corruption before countries start pegging their currency to the Yuan. They rank 127th on the global corruption index. No country is going to willingly sign up for that, a country that tightly controls it's own currency and where politics, business and corruption are all one in the same. It's just not happening.
Like it or not, the U.S dollar is simply the lesser of all the evils. And it's not even close, we're talking orders of magnitude. It also has a fortitude that is unrivaled by anything before in world history.
- rrggrr 11y ago"do something about their rampant corruption before countries start pegging their currency to the Yuan." Exactly. Reserve currency is as much about trust, political stability and transparency as it is transaction frequency and liquidity. China is a wonderful country, great people and an admirable success story. It also has the wrong political system and current value structure to rise to reserve currency status anytime soon.