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China calls for a new reserve currency

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twoshots
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25 Mar 2009, 3:09 pm

Well, no one seems to have picked up on this as being interesting, so I'm going to post it.

>>Via the Wall Street Journal<<

Thoughts?


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Sand
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25 Mar 2009, 3:14 pm

Speaking conservatively, if this is true, the USA is screwed.



ooOoOoOAnaOoOoOoo
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25 Mar 2009, 6:32 pm

I predict China will make a grab for Taiwan, then the US, then the world!! !



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25 Mar 2009, 11:45 pm

ooOoOoOAnaOoOoOoo wrote:
I predict China will make a grab for Taiwan, then the US, then the world!! !


Since the economic situation may devolve into choosing between the financial thugs of the west and the political thugs of the east China may have to fight off the nations who are eager to join it.



Dussel
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26 Mar 2009, 1:35 am

Sand wrote:
Speaking conservatively, if this is true, the USA is screwed.


Why? The USA would be in the situation like each other country. What's problem?

---

Regarding the holding of US-$ with non-US central banks: There is still a lot of talk around about "backing up" currency with gold or dollar or what else - that's nonsense. Those reserves have one task: To protect the currency against speculations on the international market: To buy back the own currency with dollar or SFr or what ever. If the dollar would loose its currently still dominating position, those holdings would be no longer needed. If they would loose their value it would be annoying for those central banks and countries, but not a catastrophe.



ruennsheng
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26 Mar 2009, 2:04 am

Though the US still has its land to support most of its people. Not many countries would be like the US. Same goes to India, too.

Not China --- now they are the only hyperpower in the world!



Henriksson
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26 Mar 2009, 3:29 am

I think we seriously underestimate China, and the influence it will have over the world. The world is starting to realize that America's bark is worse than it's bite. America will actually have to use it's own resources instead of it's fiat money.


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Dussel
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26 Mar 2009, 3:55 am

Henriksson wrote:
I think we seriously underestimate China, and the influence it will have over the world. The world is starting to realize that America's bark is worse than it's bite. America will actually have to use it's own resources instead of it's fiat money.


So-called "Fiat Money" is not that bad, if it is issued responsible. The real backing of any modern currency, aka "Fiat Money" is worth and value of the country (or economic area as with Euro or previous with Belgium/Luxembourg Francs) for which this currency is issued. If both are in a reasonable balance, a Fiat Money can be more stable and more reliable in its value than a gold-backed currency (those how promote gold or silver-currencies may should have a closer look into history books regarding difficulties with such currencies).



Henriksson
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26 Mar 2009, 5:51 am

Dussel wrote:
Henriksson wrote:
I think we seriously underestimate China, and the influence it will have over the world. The world is starting to realize that America's bark is worse than it's bite. America will actually have to use it's own resources instead of it's fiat money.


So-called "Fiat Money" is not that bad, if it is issued responsible. The real backing of any modern currency, aka "Fiat Money" is worth and value of the country (or economic area as with Euro or previous with Belgium/Luxembourg Francs) for which this currency is issued. If both are in a reasonable balance, a Fiat Money can be more stable and more reliable in its value than a gold-backed currency (those how promote gold or silver-currencies may should have a closer look into history books regarding difficulties with such currencies).

Er, I must be missing something here. Did I mention something about gold or silver?


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Dussel
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26 Mar 2009, 6:09 am

Henriksson wrote:
Dussel wrote:
Henriksson wrote:
I think we seriously underestimate China, and the influence it will have over the world. The world is starting to realize that America's bark is worse than it's bite. America will actually have to use it's own resources instead of it's fiat money.


So-called "Fiat Money" is not that bad, if it is issued responsible. The real backing of any modern currency, aka "Fiat Money" is worth and value of the country (or economic area as with Euro or previous with Belgium/Luxembourg Francs) for which this currency is issued. If both are in a reasonable balance, a Fiat Money can be more stable and more reliable in its value than a gold-backed currency (those how promote gold or silver-currencies may should have a closer look into history books regarding difficulties with such currencies).

Er, I must be missing something here. Did I mention something about gold or silver?


No - you not, but I am certain that this argument will come, because the most of the critics of the so-called "Fiat-Money" do also often promote a return to currency based on gold or silver.



Henriksson
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26 Mar 2009, 6:10 am

Dussel wrote:
Henriksson wrote:
Dussel wrote:
Henriksson wrote:
I think we seriously underestimate China, and the influence it will have over the world. The world is starting to realize that America's bark is worse than it's bite. America will actually have to use it's own resources instead of it's fiat money.


So-called "Fiat Money" is not that bad, if it is issued responsible. The real backing of any modern currency, aka "Fiat Money" is worth and value of the country (or economic area as with Euro or previous with Belgium/Luxembourg Francs) for which this currency is issued. If both are in a reasonable balance, a Fiat Money can be more stable and more reliable in its value than a gold-backed currency (those how promote gold or silver-currencies may should have a closer look into history books regarding difficulties with such currencies).

Er, I must be missing something here. Did I mention something about gold or silver?


No - you not, but I am certain that this argument will come, because the most of the critics of the so-called "Fiat-Money" do also often promote a return to currency based on gold or silver.

*drums fingers* No, I don't think that. :?:


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parts
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26 Mar 2009, 11:10 am

ooOoOoOAnaOoOoOoo wrote:
I predict China will make a grab for Taiwan, then the US, then the world!! !


Supply lines are way too long and it would invite a nuclear war including most of the US which is a major Ag producer and all that farm land would be useless


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Henriksson
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26 Mar 2009, 12:41 pm

parts wrote:
ooOoOoOAnaOoOoOoo wrote:
I predict China will make a grab for Taiwan, then the US, then the world!! !


Supply lines are way too long and it would invite a nuclear war including most of the US which is a major Ag producer and all that farm land would be useless

Exactly, I always roll my eyes at people who say country X is going to take over the world. An invader has to bring guns and butter to the front. In past times, it was better to wage wars in different countries to feed on the opposing country's resources. For example, 17th century Sweden could impossibly feed it's army on it's own, so wars in more richer, less strong neighboring countries like Poland and Holy Roman Empire was the result. In the 19th century this was infeasible due to better defense and better agricultural methods, leading to bigger armies and more complexity. No country is capable of taking over the world.


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Dussel
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26 Mar 2009, 1:39 pm

Henriksson wrote:
parts wrote:
ooOoOoOAnaOoOoOoo wrote:
I predict China will make a grab for Taiwan, then the US, then the world!! !


Supply lines are way too long and it would invite a nuclear war including most of the US which is a major Ag producer and all that farm land would be useless

Exactly, I always roll my eyes at people who say country X is going to take over the world. An invader has to bring guns and butter to the front. In past times, it was better to wage wars in different countries to feed on the opposing country's resources. For example, 17th century Sweden could impossibly feed it's army on it's own, so wars in more richer, less strong neighboring countries like Poland and Holy Roman Empire was the result.


And there is something else to see: To stay with the example Sweden in 17th century. Till 1648 the Swedish intervention was welcomed by German princes and Free Cities as counterweight against Habsburg. When 1648 Habsburg's claim was contained this support ended and therefore no one took any action in favour of Sweden, when Sweden was defeated in Battle of Fehrbellin 1675.

In other words: If a nation becomes to strong it looses friends and allies. This pattern has been repeated within the recent 500 years more than ones.



ruennsheng
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27 Mar 2009, 12:51 am

The only way China can become a hyperpower is to make itself look weak for the next 1000 years.

If China learns to respect every country's sovereignty and builds an informal system of capitalism around it through trade, as well as not wasting money on non-constructive defence works, I am sure such focus on the economic well-being of the people will be safeguarded as China will still become a strong economic powerhouse without any wars.

The US still can catch up if and only it stops waging wars... and focus on other bigger issues.



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27 Mar 2009, 4:13 am

ruennsheng wrote:
The US still can catch up if and only it stops waging wars... and focus on other bigger issues.


The USA spend more money absolute and in percent of the GDP than any other larger western country (USA 4.06%, France 2.60% UK 2.40%, Germany 1.50% - Source: CIA). This is a constant drain on the resources and running an empire is expensive and war too.

It could well be that the current economic crisis could force the USA to rethink this engagement (to the horror of European countries, which would need to spend more - something quite unpopular with the voters in Europe).