(01-13-2018, 09:09 AM)Kinser79 Wrote:(01-13-2018, 07:41 AM)David Horn Wrote: The USD is as powerful as it is because it's reliable. Everyone needs a reserve currency to have for trade and a store of value. Eventually, it may be the Renmimbi rather than the USD, but not now or soon.
The reserve of choice for the past several thousand years has been gold and suplimented with silver. The use of a fiat currency as reserves is an adoration of those economic norms. If the Chinese manage to make RMB fully convertable to gold the USD will lose that "reliability" over night. But then again fiat currencies are reliable in only one thing...failing eventually.
Give the the tendency of the US to cut nations off from SWIFT at the drop of a hat increases the incentives for other nations to look to get out from under the dollar. As a result trade between Russia and China has increased dramatically and soon there will be another oil market completely independent of the dollar that the US can not bomb into oblivion like it has been doing for the last fifteen years. This is what the wars are really all about.
All fiat currencies have failed and the dollar will be no different than any other. It is entirely possible that the new futures contracts are a step toward making the RMB fully convertible.
Democracy is the theory that the common people know what they want, and deserve to get it good and hard. -- H.L. Mencken
If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action. -- Ludwig von Mises
If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action. -- Ludwig von Mises