5 ms·

The Yuan is never going to be a global reserve currency with how opaque the CCP is.

bloppe 9mo ago
The bar has been significantly lowered in the last year since the US has decided to commit bigly to unpredictability. Another 3 years of these kinds of manipulations and the Yuan could very well look like the lesser evil to a lot of countries.
- UltraSane 9mo ago
  Still nowhere near what the CCP does.
- XorNot 9mo ago
  The Euro is like, right there? Its a market larger then the US.
  - vachina 9mo ago
    Europeans dont make stuff i want to buy.
    - XorNot 9mo ago
      Neither does the US that's not the utility of a reserve currency.
- throw0101a 9mo ago
  > The bar has been significantly lowered in the last year since the US has decided to commit bigly to unpredictability. The yuan/renminbi is currently about 8.5% of all foreign currency transactions. That's on a similar to CAD and AUD (6%): * https://en.wikipedia.org/wiki/Template:Most_traded_currencies https://en.wikipedia.org/wiki/Template:Most_traded_currencie... It has a ways to go still.
tastyfreeze 9mo ago
The first currency to be gold backed will take the crown. China appears to be building towards that end.
- unethical_ban 9mo ago
  I don't understand why gold-backing is required. I'm a novice. My understanding is that a reserve currency requires fluid markets and a stable, reliable, metrics-based currency policy. It's why the Fed is so stubborn about its relatively simple policy goals: 2% inflation and low unemployment.
  - tastyfreeze 9mo ago
    Partially gold backed reduces counter-party risk. Fully gold backed, and exchangeable, eliminates counter-party risk. China appears to be attempting to reproduce what the USD was before it was free floating. USD is currently backed by debt and nominally military might. If the US defaults then all of the US bonds held by foreign banks become worthless. That is an enormous risk which is why countries have been divesting from US bonds. If USD was still gold, as it was before 1913, if you hold your money it cannot be made worthless by a third party. After 1913 USD became gold backed bills with partial reserve. It is why USD became the global reserve currency. But, reserve requirements were reduced and more paper was produced. In 1971 Nixon removed the convertibility of paper bills to gold metal effectively stealing the gold of any nation that asked the US to hold it. One of my favorite bits of currency trivia is that a $20 double gold eagle coin used in circulation prior to 1933 had a gold content of 0.9675 troy ounces. Twenty dollars in your hand was literally nearly an ounce of gold.
    - PaulDavisThe1st 9mo ago
      This simplistic explanation seems to elide the very point it makes ... a gold backed currency becoming a non-gold backed currency was done via a political decision making process, just as any decision to default on US national debt would be. You seem to suggest that people should worry about a default claiming if we had still had a gold backed currency the risk would go away ... "if you hold your money it cannot be made worthless by a third party" ... but it can be made worthless by a government any time that government chooses. The government (having defaulted on gold-backed debt) could simply refuse to convert the paper of the debt to gold (sure, that would be bad, but hey, they've already chosen to default, so not much worse ...)
deleted 9mo ago
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marcosdumay 9mo ago
The Yuan already is a popular reserve currency. What is this crazy idea that every single country must act all the time in the same simplified way?
- UltraSane 9mo ago
  The Yuan is not a popular reserve currency. It has less than 2% of share vs 57% for the USD.

The bar has been significantly lowered in the last year since the US has decided to commit bigly to unpredictability. Another 3 years of these kinds of manipulations and the Yuan could very well look like the lesser evil to a lot of countries.

UltraSane 9mo ago
Still nowhere near what the CCP does.
XorNot 9mo ago
The Euro is like, right there? Its a market larger then the US.
- vachina 9mo ago
  Europeans dont make stuff i want to buy.
  - XorNot 9mo ago
    Neither does the US that's not the utility of a reserve currency.
throw0101a 9mo ago
> The bar has been significantly lowered in the last year since the US has decided to commit bigly to unpredictability. The yuan/renminbi is currently about 8.5% of all foreign currency transactions. That's on a similar to CAD and AUD (6%): * https://en.wikipedia.org/wiki/Template:Most_traded_currencies https://en.wikipedia.org/wiki/Template:Most_traded_currencie... It has a ways to go still.

tastyfreeze 9mo ago

The first currency to be gold backed will take the crown. China appears to be building towards that end.

unethical_ban 9mo ago
I don't understand why gold-backing is required. I'm a novice. My understanding is that a reserve currency requires fluid markets and a stable, reliable, metrics-based currency policy. It's why the Fed is so stubborn about its relatively simple policy goals: 2% inflation and low unemployment.
- tastyfreeze 9mo ago
  Partially gold backed reduces counter-party risk. Fully gold backed, and exchangeable, eliminates counter-party risk. China appears to be attempting to reproduce what the USD was before it was free floating. USD is currently backed by debt and nominally military might. If the US defaults then all of the US bonds held by foreign banks become worthless. That is an enormous risk which is why countries have been divesting from US bonds. If USD was still gold, as it was before 1913, if you hold your money it cannot be made worthless by a third party. After 1913 USD became gold backed bills with partial reserve. It is why USD became the global reserve currency. But, reserve requirements were reduced and more paper was produced. In 1971 Nixon removed the convertibility of paper bills to gold metal effectively stealing the gold of any nation that asked the US to hold it. One of my favorite bits of currency trivia is that a $20 double gold eagle coin used in circulation prior to 1933 had a gold content of 0.9675 troy ounces. Twenty dollars in your hand was literally nearly an ounce of gold.
  - PaulDavisThe1st 9mo ago
    This simplistic explanation seems to elide the very point it makes ... a gold backed currency becoming a non-gold backed currency was done via a political decision making process, just as any decision to default on US national debt would be. You seem to suggest that people should worry about a default claiming if we had still had a gold backed currency the risk would go away ... "if you hold your money it cannot be made worthless by a third party" ... but it can be made worthless by a government any time that government chooses. The government (having defaulted on gold-backed debt) could simply refuse to convert the paper of the debt to gold (sure, that would be bad, but hey, they've already chosen to default, so not much worse ...)

deleted 9mo ago

[deleted]

marcosdumay 9mo ago

The Yuan already is a popular reserve currency. What is this crazy idea that every single country must act all the time in the same simplified way?

UltraSane 9mo ago
The Yuan is not a popular reserve currency. It has less than 2% of share vs 57% for the USD.