Europe’s central banks are starting to replace dollar reserves with the yuan
qz.com
qz.com
Before declaring fall of USA, blaming Trump for apocalypse and anointing Xi as the new Emperor, lets take step and really see the numbers.
$611 million is a marginal amount when we are talking about foreign reserves, its sure not nothing, the Germans are basically telling Americans hey look what we can do here. Its a passive aggressive move but mostly symbolic.
If they buy more Yuan, and Yuan to Dollar exchange rate gets effected. Walmart needs to shop somewhere else because Chinese goods are not cheap any more.
The exchange rate between the dollar and the yuan is set by the rate at which China is buying US debt not by the global markets.
China prints money to buy US debt it allows China to devalue its own currency without devaluing its assets and this deal allowed the US to pretty much generate as much currency as they want through cheap debt without devaluing it.
The only thing that would affect Walmart is a tariff war with China, Europe can huff and puff all it wants but it isn’t a relevant player in this specific scenario.
https://www.cia.gov/library/publications/the-world-factbook/...
Takeaway: EU GDP > America GDP ( don't forget, also the Euro vs USD rose since the start of 2018) ;)
https://www.thebalance.com/dollar-to-yuan-conversion-and-his...
https://www.thebalance.com/how-does-china-influence-the-u-s-...
https://www.cluteinstitute.com/ojs/index.php/IBER/article/do...
However I haven't read them thoroughly, so I suggest you invest some time in doing some research.
P.S. I really hate this source/citation discourse that is effectively taken over every debate on the internet opinions can be constructed out of vast amounts of information and experience and even casual observations tend to be the product of much more information that can be distilled into bit size pieces.
Just do research and learn, stay away from wikipedia and go for academic and sources and don't shy from even biased opinion pieces as those tend to be some of the most valuable as they expose you to concrete positions and being wrong or right does not change their value.
Why would I read comment sections if I'd already had the time and been able to find high quality sources to learned about the topic?
If you don't feel like citing sources, or don't have any good ones handy, saying so is fine. But even providing the right terms to search can be helpful!
That means that if you're an econ PhD and you tell me a basic statement, I'll trust it in real life. On the internet you'd have to prove you're a PhD first. It really does limit the conversation we can have. A lot of the time I find myself talking to someone (or arguing with them) and realizing they don't have the framework to hold the conversation - they'd need to read a half dozen books and do some intensive study because they want to work through problems that have already been solved.
On a more anecdotal side the people I tend to "trust" the least at least on the internet are those who often come out with citations for everything and dump a huge wall of text.
The problem with the internet is that you can find a citation for everything, I can find that enough citations that lizard aliens are actually the ones who control the exchange rate of the Yuan to the Dollar using a weather machine.
The credibility of sources is also extremely hard to determine these days especially in subjects which are not your primary proficiency it's too easy to publish anything you want these days even in reputable sources.
My point was partially that if I encounter you in another environment, I can quickly and easily assess whether you have the required proficiency, even if I don't possess it. It's much harder to do that online, at least at the moment.
I can't always do my own research, as I don't have the time to build a framework of knowledge that would allow me to do it efficiently, much less brute force it. All I can do is ask people I know who are very well educated in a field or read an abstract.
That is entirely wrong.
There is only a limited amount of Yuan, so by definition the supply of Yuan is affected, no matter in which currency it is bought. Therefore, the price is affected as well.
Will wheat in USD get more expensive if I buy all your wheat with Ruble? You bet it will.
For Europe to buy Yuan it needs to exchange something for it, usually another currency likely in this case the dollar rather than EUR.
The hard limit is more on how much EUR does China wants to hold and how much USD Europe is willing to spend on buying Yuan.
Beyond that you also go into the realm of would China allow Europe to hold large amounts of Yuan, countries tend to be protective of their currency and restrict any single entity from holding amounts large enough to do substantial damage if dumped. Basically they would allow you to buy enough currency for them to benefit but not enough for you to hold it over their head.
So China is printing money to buy up the debt generated by the US printing money? I'm not an economist, but that does not sound like a reasonable way for a world economy to run on.
It also wants stability so it basically pegs the Yuan to the dollar, historically directly and more recently in directly (the Chinese central bank sets more or less of a fixed exchange rate but it does allow it to deviate somewhat these days).
Now to prevent the Chinese economy from being effectively run on and by foreign currency China heavily restricts the ownership and settlement in foreign currency internally. It basically forces the exporters/manufactures to exchange the foreign currency they paid in (usually USD) back to Yuan for any internal use (or alternatively if you want to do business in china you basically have to exchange your currency in Yuan it's the same thing).
It then uses that surplus of foreign currency to buy other assets, primarily dollar bonds such as US treasury bonds which basically brings back all those dollars that came from the US and everywhere else in the world back to the US.
And even this is like very very basic overview of things.
On some level the US economy or at least the dollar economy is basically based on the fact that the dollars used in international trade have to come back to the US.
Basically you buy dollars from the US, you use those dollars to buy something e.g. goods from China then those dollars go straight back to the US in exchange usually for "cheaper" dollar bonds. The debt economy a side the scheme is when viewed on a global scale is almost like you never actually own a dollar you simply rent it out.
[1]http://www.macrotrends.net/2575/us-dollar-yuan-exchange-rate...
But China very much still controls the exchange rate of the Yuan to the dollar and still devalues it's currency in order to boost exports.
Not to mention which the post-world-war-II international order is falling apart politically which suggests there will be a monetary realignment in the not too distant future.
This isn't a big deal because of the relative size of the flow; it's a big deal in the way that a dam suddenly spouting water around the edges is a big deal.
To do this effectively you must hold a strong currency as your reserve- there's no point holding Zimbabwe dollars. So any reasonable reserves for a European country today will be part Dollar, Pound, Yen and Yuan. How much of each should be proportional to how stable that currency is and how highly correlated it is to your own currency.
This is not a political message, the ECB is just neutrally moving more towards Yuan as the Chinese economy gains importance relative to the US economy. That's all. It's not a good sign for the US, but the ECB has better ways to send political messages than buying $X00m dollars or Yuan.
IMHO this isn't necessarily true. A weaker dollar could mean stronger exports.
Edit: yeah - the Europeans make cars... Volkswagen is the second largest in the world, after Toyota. Daimler (Mercedes) is fourth. Apparently, the top-16 based on revenue includes only 3 American companies...
I casually glanced through a few Google images matches for "traffic in Paris". I do not know much about cars but all seemed to be European or Japanese.
Perhaps they sell better in the UK than continental Europe or something, I don't know, but tens of thousands of cars sold per month is not nothing.
Another chart shows that even the largest maker, VW, only has like 23% of the market: https://www.statista.com/statistics/263421/market-share-of-s...
Oh and if you take the "but designed and built in ..." standard, then there simply is no European car anymore. Most components are Chinese, Indian, or at the very least Eastern European (outside of EU)
b) That's simply not true. Automotive supply chains indeed are quite global nowadays, in this regard you could say there's simply no <insert nation here> car anymore, for any given country/region. But - in contrast to other sectors - the automotive industry (including parts industry) is HUGE in the EU, including actual manufacturing.
We give the world informational products and they send us physical goods. Seems like a good deal to me.
Why isn't it good for the U.S. that the rest of the world get wealthier? Of course it is.
Ideally the rest of the developing world grows far richer than they are today, which gives the US (and everybody else) more lucrative trading partners. Countries like: Vietnam, Indonesia, Brazil, Colombia, India, Nigeria. Even present mid-tier nations like Estonia, Czech, Slovakia, etc you want to see them go on to become the next Austrias and Denmarks. It's all very beneficial to the US and everybody else.
In addition, China has enormous interest in maintaining the dollar as the reserve currency. Keeping the USD as reserve currency allows the US to borrow at very low rates, and borrowing at low rates is a pillar of its debt-driven economy. The US debt-driven economy is what makes a market for Chinese exports. And China's economy is basically exports plus infrastructure investments by state-owned enterprises. Take away the US for the exports and China has a huge problem. That's why it buys so many Treasuries.
There's also an argument to be made that the yuan is over-valued. It took a nose-dive when China briefly removed currency controls (last year?) because a lot of people wanted to move their money out.
I also work with multiple ex-pats that fled fearing for their life due to persecution based on their religion (Falung Gong), and laugh at how freaked people are about an insignificant Trump compared to a truly vicious government.
2. Because they shouldn't
If instead of treating global economy as a zero-sum game, and if we backed off from the fear mongering and admitted that China's economic growth has largely (and unsurprisingly) been to most people's benefits, then we'd welcome the competition and innovation and productivity that China has and will continue to provide.
(+) unless you limit your knowledge of sexual preferences to just gay/straight — human sexuality is much more complicated than that.
In the past, the West has had a massive advantage because: (1) their econpomic system was better than everyone else's, and (2) in order to modernise, other cultures have had to adopt some of the West's characteristics, including a greater level of freedom of speech/thought than in other societies. The combination meant that the West had few serious ideological competitors.
But if China becomes the world's biggest economy, if it continues to increase its economy so its per capita GDP is the same as in the USA and western Europe, and it does this while still being an autocracy, things will get very very serious.
The future may well be a jackboot stamping on a human face forever.
(Of course, all of the above were decades ago, so we need to keep an open mind about the condition today in the respective countries.)
I'd say after those it was business and usual, and those involved didn't get even a slap on the wrist. If anything, venting through the press merely let people get steam out and forget more easily....
But we didn't get a repeat of either episode. That raises the possibility that people learned lessons, albeit imperfectly, from those experiences of others, which is something for which humankind (not uniquely among the species) has at least some talent.
That's a benefit of a free press. It can be aggravating to see some of the shadier so-called journalists go shamelessly whoring after eyeballs. Still, journalists' collective, competitive desire for attention helps to bring "training cases" (in NN terms) to a broader societal audience. That seems to influence at least some people's behavior. Over the long term — and not without exceptions, some catastrophic — that influence, on balance, is usually for the good.
And still, "twenty-eight guardsmen fired approximately 67 rounds over a period of 13 seconds" -- killing 4 and injuring many more.
Which begs the question, if there was major potentially elite affecting / government toppling issue instead of a small scale anti-war protest at a local university, what would be the response?
These what-ifs of history are certainly interesting though!
Which is why I said “religious” and “sexual preference”.
Jews were widely discriminated against even a few years after WW2; Muslims are a current whipping-boy; I’m not sure if Catholic-vs-Protestant is as big a divide in Northern Ireland as it looks from the outside, but it does look big; In the USA, Atheists are almost as disliked as Muslims.
Then there’s sexual preference. You’re fine if you’re gay (finally!), but not so much if you’re into BDSM or have any fetishes more complicated than underwear. Also, I have a friend whose sexuality was previously legal, but which was outlawed in half of Europe and half of the USA this century. I invite you to guess what that might be.
The hypocrisy of a country that props constant wars all around the globe, has bombed/invaded 3-4 countries in the last 20 years alone, and constant meddling and manipulations of other governments for its "interests", that had segregation up to the 70s, the worlds largest prison populations by a huge margin, with routine police shootings in the 10x of any other country, pointing the finger to another country for "religious persecution" and "discrimination against sexual preferences" (which itself until 2000 or so had laws declaring "illegal" in many states, and even now has a good 40% or more of the population considering them immoral and believing in all kinds of Bible crap), never ceases to amaze...
I am criticising American states for criminalising a sexuality that my own country never legalised.
I am also appalled by my own country’s behaviour in the colonial era.
The one big problem, though, is that China does not believe in freedom. At all. Censorship, no free press, no freedoms of opinion, expression, religion, etc. And they see nothing wrong with that. Whenever the US hurts these freedoms, they get criticised, even by their own people, and they eventually back down.
The fact that the US promises freedom but constantly breaks that promise makes them hypocrites, but it also always has the option that they will get back to their promise. China does not see the point of freedom at all, and considers it dangerous. And that's terrifying.
If we're going to have a superpower, I would love a China that respects freedom in that role. They would be better at it than the US. But current China is not that China.
As flawed as the US is, they at least have that going for them (pre-Trump US, at least). Though ideally, the EU would step up. They don't seem to want to, though.
The US has lofty goals and noble promises, but has always fallen far short.
The one big problem, though, is that China does not believe in freedom
Where I disagree is that as a superpower China has been benign. They might have their territorial issues with their neighbors (like every other country, much more an ancient one in a much changed region), but they don't impose their (internal) non-freedom or whatever on the rest of the world with any kind of crusades.
>The one big problem, though, is that China does not believe in freedom. At all. Censorship, no free press, no freedoms of opinion, expression, religion, etc. And they see nothing wrong with that.
That's for themselves to fix/decide, as it is a matter of internal politics. Heck, their majority of their people might very well be fine with it, as they have a totally different political tradition than democracy, going back to taoism and on. Are there dissenters? Sure, but the kind of Chinese people westerners tend to fraternize with are exactly those that would adopt various western values or want some regime change, but that doesn't mean they represent anywhere near a majority -- it's a selection bias.
> Let China thusly slumber, for when China wakes up the world will shiver
— Napoleon 1er
The Chinese do not value things like freedom or tolerance very much, especially if they conflict with order. The value of the individual is also extremely low, whereas the West held the individual as the most valuable thing until just recently when group identities became incredibly important for the sake of skin-deep diversity. It will be interesting to see how that continues to creep into Western culture.
And recently, lots of laws have been passed restricting freedom.
NSA has been watching your every move.
The west only has freedom on paper.
And countries change and adapt.
Let me know when they start black-bagging dissidents for speaking up a bit too much.
There are festering problems regarding surveillance in the West, and the prison system is a bit much here in the US, but "freedom on paper" is a load of BS.
“The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum....”
- Noam Chomsky
I've been rail-roaded by vindictive government officials who abused their power. Been arrested for it, even. I know what it means to have my first amendment rights violated at a fundamental level.
> McCarthyism and antiblackness are still very much built into the functioning system of western nation states.
That's, like, your opinion man.
Highlighting select abuses of power doesn't negate the fact that I can openly criticize our government, advocate for change, run for office, and store enough small arms to organize an insurrection without fear of reprisal. We may not have absolute freedom, but no one does and no one ever will. In the context of the conversation, we have a helluva lot of freedom. Much more than the comment I responded to appeared to suggest - that we're no better than China.
So it's not really just my opinion, man. It's demonstrable historical fact. It's just swept under the rug and shouted over with jingoism and other propaganda about how much freedom we enjoy.
Well, that's what happens when you engage in crime, violently resist, and engage in the actual act of insurrection ;)
As it were, the Blacks are not the only ethnicity that have ethnic separatist movements that have been violently squashed, or did you forget the militia movements and subsequent Federal suppressions of the 90s? I suppose that might hurt your narrative, however.
Which is true. But most US citizen doesn't realize how their system, while extremely bureaucratic in nature, protect real bad things from happening.
There both have upside and downside. Only History will tell.
Hard to say how Communist China as a superpower will differ from Imperial China, though...
Korea and Vietnam would beg to differ.
It takes two to tango. In that regard, it feels kinda dishonest to frame these conflicts solely as "Evil China/Communism doing its thing".
Normally fud isn’t well documented: https://en.m.wikipedia.org/wiki/Persecution_of_Falun_Gong
The US dollar has been the 'target' of such exchange rate manipulation is mostly because of its role as the largest import economy. As a result, if China becomes the next big importer, other export-oriented countries will probably do the same trick like it has been doing to the US.
In any case, China hasn’t been significantly manipulating its currency at least for the last decade. Such charges had some validity in the early 2000s, but that’s old news. Since then China has largely diversified its currency holdings and it’s not really an issue, see link below, but there are stil votes in China bashing.
https://www.economist.com/news/finance-and-economics/2171799...
The article below from 2 years ago on this also sheds some useful light. At the time the dollar had recently rapidly appreciated against most other currencies, but the Yuan was at that point fairly strong and then stayed stable rejecting an opportunity to depreciate along with everyone else. In hindsight the articles analysis has proved to be remarkably prescient. The European banks accumulation of Yuan is testament to the increasing credibility of the Yuan, as it predicted.
https://www.economist.com/news/finance-and-economics/2164420...
The Yuan, given China's economic strength, has nowhere to go but up. We'll have to see how European Central banks like that in 10-20 years when they exert more influence on policy.
When the yuan is actually traded in the wild, then it will move a few steps closer. I don’t think the government will ever let it get stronger than 6 rmb/usd, it would absolutely ruin their exports.
Trade might be controlled, but definitely not flat http://www.xe.com/currencycharts/?from=USD&to=CNY&view=10Y
Japan is the third or fourth largest economy and the 11th most populous country in the world. Nothing middle about it.
They were the world's second-largest economy until a few years ago, were they not?
[1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
Haven't you ever wondered how it is that the US is going deeper and deeper into debt, how we increased the US Monetary Base 400% since 2008 [1] with no economic consequences, how we 'printed' (not really) trillions of dollars in quantitative easing, or more generally how now we're only paying off old debts by taking on even greater levels of new debt with no reversal anywhere in sight? If a private organization was doing that, it'd be called a Ponzi Scheme. Yet we engage in all of this with minimal to no economic consequences.
But none of this matters because the USD represents access to oil. Oil is the most in demand resource in the world. And when the price of oil is pegged to the dollar, it makes USD the most in demand currency in the world. But China recently has been making huge strides in getting nations to swap to the yuan for oil. Rather than give any links go search for 'china oil yuan' and you'll get countless articles all within the past couple of months about what China has been doing. In particular China is attempting to even get Saudi Arabia to start pegging their oil to the Yuan, which would be an enormous blow to the US. If they succeed here, it may mean that the USD will need to stand on its own weight. And at that point, we may have to answer for our own economic decisions.
Feel free to elaborate
Currency inflates due to inflated supply -> foreign countries take more of the currency out of supply -> inflation decreases. And it doesn't end there. The additional revenues from the oil producing nations are then invested into US securities and taken completely out of circulation. The vast majority of money is not brought into circulation through printing, but leaving the specifics of creation aside, this -in part- helps buffer any harm caused by the excessive 'printing' of money.
So people will lend to the US as it had a lot of income, assets and a reputation for paying. Compare that to the country with the world largest oil reserves, Venezuela.
By contrast, imagine all oil producing nations suddenly stopped exporting any oil tomorrow. Once domestic reserves of countries ran out the entire world would grind to an incredibly rapid halt. Electricity, transportation, shipping, and everything would stutter and then come to a near complete stop. And society itself would likely break down in very short order. It's not about the dollar value of oil, but about its relevance to society. You'd think those two would be strongly correlated, but they're not.
This is why oil and the petro-dollar have so much inherent value. Without oil society collapses, and USD is the gateway to oil. That 'is' may be changing to 'was.'
What is the explanation for Japan? They don't have oil and they have greater debt than the us (relatively), yet they haven't been met with anything worse than stagnation.
Even then, I think you have keep things in perspective. 'Just stagnation' understates the situation here. In the late 80s many thought Japan was literally going to take over the world economically. Their GDP today is now lower than it was 2 decades ago. And ultimately there is still no clear path for them out of this decline.
The entire world economy was deleveraging at an enormous rate and essentially destroying tons of money in the process. Fractional reserve banking essentially lets banks create money; when everyone is busy running for the exits of course the Fed can increase the base by 400% and we would merely be treading water.
Until people around the world can speculate freely on the yuan, and yuan denominated futures like people can with QA and CL, I don't see this having much impact.
Speculators will make up most of the daily volumes, and most never want to take physical delivery of the "gold convertibility" yuan denominated oil futures on expiry, and most certainly want to be able to take their profits out of the yuan to whatever asset of their choosing. Without the the yuan floating, this will be a relatively non liquid market.
>In particular China is attempting to even get Saudi Arabia to start pegging their oil to the Yuan, which would be an enormous blow to the US.
Yeah, I don't see the Saudi's buying Chinese weapons and US weapons without the US giving it's approval [0], because they certainly don't have the same capacity as the US for their citizens buying Chinese goods.
If the EU was actually serious about more trade with China, they should drop a lot of the anti dumping restrictions they have now on trade ;)
[0] https://foreignpolicy.com/2014/01/30/why-did-saudi-arabia-bu...
https://www.washingtonpost.com/news/wonk/wp/2018/01/11/the-c...
That is a more relevant data point of its buying power right now, and potential impact it would have on other economies, if China decides to use its market as a weapon.
US' track record isn't stellar, especially over the past 2 decades, and in the past decade the US has also taken a backseat in terms of actually protecting humans rights, even during Obama's time, but at least if you discount US' human rights violations in the Middle East, the US has been rather neutral on human rights (read: not positive) elsewhere. China may actually turn things to a negative trend for human rights everywhere else.
The UK under David Cameron had already started to use China as a role model for domestic censorship and surveillance. If China's influence grows, I imagine many other countries will follow UK's lead.
Now, instead, it's China, and we're still not getting anywhere.
I'd rather fight with the other european countries over such small details than live in a world ruled by an autocratic China.
If you really object to a federal Europe that much, I suggest you offer a better solution for how Europe can compete on the world stage with China and the US in the future, and do so successfully.
People willing to work will have a lot less problems in Europe than anywhere else. Even when falling suddenly ill
Most of the people being against the EU are against it because they only ever hear the bad sides? They never realize that most of the bad things "the EU" did were actually things the council did. Which actually just means that the heads of states of all EU nations agreed on it. If you end the EU, all power goes to these negotiations, and you'll only see that bullshit.
In turn, almost all the advances in civil rights that the EU courts and parliament have given us is attributed by the media to the national governments.
Start off with replacing this propaganda, and you'll have broad support for the EU very soon.
It sounds like you just want to substitute another set of propaganda .
Many people were quite happy to establish a European Common Market.
Few had a direct input to moving that to Union.
So first you'd need to turn the clock back 40 years and explain why anything deeper than a market is necessary.
I think that’s pretty obvious, when you’re trying to compete with China or the US head-on, isn’t it?
Do you really think "just a market" of european nations will ever be able to stand alone on the world stage, being able to negotiate on eye level with another superpower?
Do you think we will be able to get our own Silicon Valley ever, when startups have to deal with 28 tax laws, 28 consumer laws, 28 different languages, 28 different regulations for everything? No European startup has ever actually managed that. They always first expand in their home country, and then to the US or China – the largest unified markets with unified laws and unified languages, where they can grow better. And companies starting in those markets always have an advantage.
Do you think in "just a market", our legislatives and executives would ever have been able to regulate companies as large as Google? Companies so large that if you ban them from your country, half your country’s productivity is lost over night? If you try to regulate them when you’re just Denmark, Google will just stop running in your country. No European country alone would be powerful enough to regulate such large multinationals anymore. Only together are we large enough that these multinationals have to cave.
Do you think negotiating a separate treaty for each of the things we currently do via EU law would be better? Treaties take years to negotiate, and will run for decades. You can’t just replace them, or change them. On the other hand, every 4 years we can just replace all EU institutions, and the parliamentarians, and change policy. This allows a much more democratic decision process.
That aside: It isn't undemocratic to not do a ballot. In a parliamentary democracy parliaments can decide most things themselves (even all, depending on the country). That's what they get elected for in the first place.
After the No vote, the government made a much larger effort to explain to the public what Lisbon did and they got guarantees from the EU as to interpretation of wording.
I think you could kuschku's suggestion that you need to get the population of each state on board before progressing. The turnout for the 2nd vote on Lisbon (which was a yes) went up to 59% from 53%. Looking at the vote from outside, it definitely seemed like people were much more engaged in the second vote than they were in the first.
I don't know why repeated votes would be undemocratic. There is absolutely no suggestion that the second vote was fraudulent. You're allowed to ask the same question of the population again once more information is available.
Can we not just discount the issues with china then as well?
I think the one big difference here is that nobody expects china to invade their country, violate human rights within their own country or put pressure on their local politics for various reasons (other than random trade agreements maybe).
All things nearly everyone pretty much expects from the U.S. at this point.
But if you think China doesn't exert pressure in other countries' politics you haven't spent much time in Asia, particularly SE Asia.
That's one of the component that's given the US a lot of influence and power dealing with the world. This was aided by how inward the competing powers were.
There's been a backlash against those ideas as foreign policy both inside and outside the US. As evidenced by the current president.
It's my hunch that in the long run the US will miss the privilege and benefits that have come from that asymmetric relationship. 4 or 8 years can be a long time and a lot can happen when were standing still.
Just look at England, they've never fully come to grips that the sun has set on the English empire.
Which country has the US exported its inflation to? Venezuela? Apologies for the tongue-in-cheek but even an economist would not be able to reconcile why there isn't really any inflation amongst the major economies.
The inflation if visible in asset prices, eg. a painting would sell for half a billion dollar, all these companies being evaluated at billions of dollars, now holding billions of $ as state reserve doesn't look so big anymore.
Unless those billions in asset price increases buy less consumables than they did before QE, there isn't any inflation in the US yet, it just means Americans are richer.
The article states that 1% of Europe's reserves are in yuan, and they increased it by $611 million, which is about 1% of that 1%. Meaning 0.01% of the total 6.9 Trillion.
And furthermore, the US has not really been printing money. It has been going into debt, to similar effect, but not to such an extent that the overall price levels are being affected. The price of a loaf of bread is still about the same from year to year.
There are particular industries that are seeing rising prices, like healthcare, education, and real estate as a result of many factors, none of which involve the money supply.
This is completely backwards.
>meaning you can't print like crazy and export your inflation in the world.
This is why other countries are moving away from the US dollar as the reserve currency (and the petrodollar as a medium of exchange for oil and other commodities). For decades we have been coercing countries, both kinetically (Iraq, Libya) and through less violent means (economic threats, access to SWIFT, ect) to use the dollar. Much of the rest of the world is tired of being coerced into using the dollar (and by extension, propping up the dollar and the US financial system through artificial demand for dollars) when alternatives (such as the Yaun) are becoming available. Much of our crazy printing and exportation of inflation has come exactly because of the countless trillions we have wasted (in the last 15 years alone) in our fruitless and amoral attempt to control the world at the point of a gun. Ironically, and not coincidentally, our desperate (and costly) attempts to maintain control of the globe are hastening the decline of our influence, both politically and economically.
Hi，I don`t think so.
I come from China, when "Falung Gong" come out I am at college, after so many years I still believe what the GOV define the movement right, it is "cults and religious extremists".
Why I believe that?
1. The "Falung Gong" is alt kind of "qi gong", I did have seen some people practice "qi gong" to keep healthy, basically, it is unscientific and ignorant.
2. "qi gong", "gong fu", "tai ji" has no leader, but "Falung Gong" has a leader. And the leader can't sacrifice himself but lead some other kind people sacrificed.
3.Now I am a more fan of the old lead "Jiang Ze Min".(Like many others in Chinese social networks, lol). I think He may make the right decision.
At last I don't think the GOV have the ability to stop and kill any movement is a good phenomenon， But there is still a line which clearly divides the cult movement from ordinary movement.
Scientific, liberal and democracy may be the most valuable thing to pursue by China people in the future. But the "Falung Gong" like cult which fool good people did not worth any remembering.
I am not talking about specific products, but those manufacturing in macro sense...
There is no use to hold a certain currency when you are not able to use it for the time being or at some point of time in the future...and the more you hold a certain currency, the longer you are expecting it is useable or the more you expect it to increase its value.
a) You can ask your trading partners to trade with you in your own currency, which eliminates currency risk for your companies. E.g. an American company can just sell their stuff for a fixed USD price, and their trading partners will have to take (or hedge) the risk of their currencies fluctuating against the USD.
b) You will have lower borrowing costs for your government debt. If your currency is a reserve currency, that means that many foreign central banks will hold your currency as currency reserves. And they won't stash cash in their cellars, they will buy your government debt (e.g. Treasuries). More people buying your debt means lower borrowing costs (and thus interest payments) for your government.
c) If you control a currency that is used for international transactions, this gives you extra-terrestial legal leverage over the parties of these transactions. The U.S., for example, uses its "ownership" of the USD to enforce their sanctions regime and other laws: many banks e.g. in Europe will not process your payments to Cuba (particularly not in USD!), even though there are no European sanctions against Cuba, just because they can't afford to lose access to USD clearing in the US and thus don't want to risk antagonizing the US.
d) You can borrow internationally in your own currency. This is not an important thing for China, which has huge reserves, but it will be for other countries. If people don't trust your currency, you will have to borrow in USD or another foreign currency. This means your country can go bankrupt: If you are running out of USD / EUR / etc. you can't service your debt anymore. If you borrow in your own currency, you cannot really go bankrupt: you can always just print more money to service your debt (this will have negative effects such as inflation, of course, but it might be less catastrophic than a default).
On the least insignificant level, the message is pretty clear: US is destabilizing, and Trump might only be the beginning of it. With a isolationist and hostile US government, EU naturally would seek another anchor for safety, which is China, to counter balance it.
[1] http://ec.europa.eu/trade/policy/eu-position-in-world-trade/
Even Macron admitted that if the French were given the same vote as the British, they'd probably leave the EU[1].
Their tactic? Just avoid a vote. A small elite closing ranks and ignoring that EU citizens simply want trade union, not political union.
There's only so many times politicians can say "it's more complicated than you peasants understand, we must federalize!" before they get kicked out. Their hubris is bringing about the rise of the extreme right.
Europeans, as in the general populace, do not as a majority want to federalize. Federalization is one of those open conspiracies driven by a particular type of person who's completely out-of-touch with normal people.
[1]https://www.theguardian.com/world/2018/jan/21/emmanuel-macro...
> Asked if the French would vote to leave the EU in the same way, he said: “Yes. Probably, in a similar context. But our context was very different, so I don’t want to take any bets. I would have definitely fought to win.
Which is quite different that what the title implies.
Would you:
1. like to stay in the EU as is or
2. like to stay in the EU with minor tweaks?It's too complicated for the peasants to understand apparently.
But if given a leave/stay question, he thought France would vote leave like the UK.
He then went on to have a rant against all the unwashed who'd lost out because of globalization gobbling their livelihoods and how they should damn well be pleased to be screwed, if you're not a university educated elite it's your own fault for sucking, politicians obviously aren't meant to represent you or your views.
What we are lacking is effective military cooperation. Even NATO is not very good at this, unless the US is shouldering the majority of the load. The situation is improving slowly, though the continued struggles of the A400m and other defense projects show that we have a long way to go still. OTOH given our strategic position and Russia's continued weakness there is no real rush.
America has been unable to even talk with America's business, internally in the white house, within Republicans, others (eg. who has the biggest button, NATO, Paris Climate, ...), ... I'm pretty sure he's guilty to everything that is said ( Eg. Russians, money-laundering, paying zero taxes, ...) How do you think such idiocracy is perceived throughout "more serious grown-up" world? There is only one word for it: incompetence.
Worst of all, he really believes he's a genius.
I get the impression the USA has been in a slow general decline for a decade or more. A whole bunch of indicators of societal health like life expectancy, poverty, inequality, upward mobility, teen pregnancy, prison population, etc. etc. are at odds with the USA's position as the world's wealthiest nation; as a result, the World Economic Forum (whoever they are?) have announced the US is at risk of losing its status as a developed nation (or something like that).
Whether justified or not, this is shocking news and means there's something systemically wrong. US corporations are discovering it's more profitable to litigate than to innovate, and more effective to buy Congressmen as rubber-stampers of friendly legislation than to do good business.
The USA dropped the ball badly on stem cell research and its multi-billion-dollar health spinoff industries, and again on renewable energy and carbon emission reduction. Since I got my degree, universities have turned into money making industries rather than institutions of scholarship and research... just a few things I've noticed, that in sum can't be good. I think the US will have trouble maintaining its economic position if its middle class is struggling, academics is de-valued and investment is mostly oriented toward short term gains.
It takes about 4 times as long as French and Spanish to become proficient.
Given the amount of time kids spend on foreign languages in school, there's no way they're learning enough Mandarin to be useful.
I took Mandarin as an undergrad, and I can understand more Spanish despite having never studied it.
10k ideograms is not that hard compared to say 7k words needed to have basic fluency in English. You would need about twice as much to be considered reasonably fluent. Grammar is relatively easy, proper pronunciation is much more critical than in English.
I'm also unaware of research showing that Chinese is comparatively better absorbed when young.
Chinese is also already available in our schools. It’s just not a high priority. It’s on par with Spanish, Greek, Russian, Japanese and some such. This doesn’t correlate to the importance Chinese has on our society these days though.
English used to be the most important language, these days it’s German and Chinese and I see nothing on the horizon to change that outlook, so it’s kind of silly to weigh it’s importance in our school system as low as Korean or Greek.
I realize it’s harder to learn, but that’s what schools are for. I mean, when I was young we didn’t teach English until the 4th grade, these days we start teaching English by age 6 and everyone learns 3-4 languages.
You're on an American site, and you talked about Brexit, so I assumed British or American.
>English used to be the most important language, these days it’s German and Chinese
I'm having a very hard time thinking of a country where both German and Chinese are more important than English. Where is this?
It's site that focuses specifically on the startup culture centered around SV. The site if full of American idioms, cultural norms, and people regularly discuss American politics and the American regulatory environment. There are far more people living in America participating than otherwise. In most cases the default behavior is to speak about American issues without prefacing with "this is about America."
There's clearly nothing wrong with speaking about non-American issues, but if you don't specify, most of us are going to assume you're talking about America.
Our most utilized languages in business and tourism used to be English, German and French.
It’s now German, Chinese and English, in that order.
In everyday usage English is still important and will remain so for years to come. But if you’re looking for languages with professional application Chinese is at the top.
>business and tourism
A search of the number of tourists from different countries visiting Denmark shows that the number of tourists from the UK and America still dwarf the number of visitors from China. So I'm not sure why you'd say that Chinese is more important than English for tourism.
It also looks like Germans have always been the largest group visiting Denmark--that hasn't changed.
As for business in general, China makes up about 4% of exports and 7% of Danish imports. So I'm not really sure by what metric you're putting Chinese above English.
> But if you’re looking for languages with professional application Chinese is at the top.
If that's true, it's more likely because 86% of Danes speak English so it's not really much of an advantage within Denmark.
China is a growing economy, but English is still the language of world commerce, science, and entertainment.
I think that you're mistaking growth rates with absolute values.
Also Denmark gets close to a million British visitors per year. And then add to that the number of visitors from countries who are very likely to speak English as a second language, and the people from countries like Ireland, Canada, and Australia.
I think the problem here is that you don't notice all of the English speakers because they just don't stick out as much as Chinese tourists do. Sure you can notice the obvious tourists, but there are plenty of them that you wouldn't know were tourists unless you talked them. Chinese culture is also much different, so they are even more likely to stick out.
In addition, I'm going to guess that Chinese tourists are a common topic of conversation and news coverage, at least more so than English speaking tourists are because it's a change from the norm--you have to change if you want to accommodate them. This can lead to you over-representing Chinese tourists in your mental model.
Source: That was my level when I went to China. I felt not at all ready, but then I discovered that my limited knowledge could get me quite far with a little effort.
Cramming for a few weeks before visiting a country is useful.
It takes the average fully trained foreign service officer who already speaks multiple languages about 2200 hours to become proficient. And this is 2200 hours at arguably the best language school in the world doing nothing but studying Chinese full time.
2 years of of Weekly classes is about 100 hours of class time.
The bar for diplomats is much higher, since they need to be fluent enough to avoid a diplomatic incident. Would you trust someone with 2 years of high-school French to speak that well?
That said, I agree that Chinese is more difficult than most other languages; mostly due to the writing system, which even Chinese schools spread over multiple years for good reason. But that is no argument against offering the language anyway.
Also interesting (to me) is that yuan, yen and won are all units based on the word for "round," in China, Japan and Korea(s) respectively. https://en.wikipedia.org/wiki/Japanese_yen#Pronunciation_and...
Similar etymological relationships for "dollar," and "thaler" units: https://en.wikipedia.org/wiki/Thaler
I believe you meant to write: "call it by its name".
When in doubt, expand "it's" into "it is". The original would expand to "call it by it is name", helping identify it as wrong.
However with the rise of electric cars in the future there may be less demand for the Petro dollar. How will a new world currency be formed, will it be a Petro Yuan or will it be a global crypto currency like Bitcoin? Doesnt a new global crypto currency need to have around 2% inflation new coins per year to stop hoarding from occurring?
US produces a lot of IT-services for example Amazon, Google, Microsoft, Uber, Netflix, Arbbnb Dropbox but nowadays less physical goods.
https://en.wikipedia.org/wiki/Monetary_hegemony
Rise of the Petro Yuan https://dailyreckoning.com/rise-petro-yuan-slow-erosion-doll...
Historically reserve currencies has lasted around 100 hundred years. https://philosophyofmetrics.com/history-of-world-reserve-cur...