Thread: China's yuan 'set to usurp US dollar' as world's reserve cur

China's yuan 'set to usurp US dollar' as world's reserve currency

The Chinese yuan is preparing to overtake the US dollar as the world's reserve currency, economist Nouriel Roubini has warned.

By James Quinn, Wall Street Correspondent
Last Updated: 1:50PM BST 15 May 2009

Comments 39



Professor Roubini, of New York University's Stern business school, believes that while such a major change is some way off, the Chinese government is laying the ground for the yuan's ascendance.

Known as "Dr Doom" for his negative stance, Prof Roubini argues that China is better placed than the US to provide a reserve currency for the 21st century because it has a large current account surplus, focused government and few of the economic worries the US faces.

In a column in the New York Times, Prof Roubini warns that with the proposal for a new international reserve currency via the International Monetary Fund, Beijing has already begun to take steps to usurp the greenback.

China will soon want to see the yuan included in the International Monetary Fund's special drawing rights "basket", he warns, as well as seeing it "used as a means of payment in bilateral trade."

Prof Roubini's warning followed the US government's latest economic data that showed producer prices in April experienced their biggest year-on-year drop since 1950, falling 3.7pc.

The number of Americans claiming unemployment benefit for the first time rose by 32,000 to 637,000 in the week to May 9. The increase meant the total number of people claiming benefits stood at to 6.56m, a record high for the 15th consecutive week in a row.

But neither the gloomy data, nor Prof Roubini's verdict on the greenback's future, held back the markets. The Dow Jones traded up 59.89 at 8344.78 in lunchtime trading.

http://www.telegraph.co.uk/finance/fina ... rency.html

so how is the Bush's/Obama's New World Order Work'n for ya America

NO, no, no and furthermore no! The yuan (renminbi) is a currency that does not trade on the currency float market equally, as the Chinese government artificially supports it. Close of today's trading was $1 = 6.8285 yuan. What supports China's support of the yuan is American taxpayers in debt to pay treasury obligations' interest, over 40 percent of which is owned by the Chinese. Were they to dump those notes on the market one day, the world's economic system would be in the toilet, and we would be the first to suffer.

China has been planning on the decline of our dollar for years. We must not allow them to fufill their dream of our demise.