Rise of the Red Dollar

[mellie]

The Renminbi.

China making the most of US turmoil, as was to be expected.

U.K. finance minister George Osborne will on Tuesday roll out the red carpet for Chinese banks looking to expand in London, offering to break down regulatory barriers in a bid to reinforce the City's position as a global renminbi hub.

In a major diplomatic initiative, the chancellor is expected to offer the prospect of special terms to China's state-owned banks as part of his "personal mission" to make London a significant Chinese offshore banking center.

The chancellor signaled his intent on Monday in Beijing, when he said: "A great nation like China should have a global currency." China, he said, should seek to develop the renminbi "through the international center of finance: London".

http://www.cnbc.com/id/101111694

Despite economic reforms and a degree of creeping personal liberty, the driving philosophy of The People’s Republic of China remains communism; so the concept of London setting itself up as the international hub and leading market for trading in the Yuan (or Renminbi as it is also known) is decidedly odd. However, China replaced Japan as the world’s second largest economy and seems to want to have greater influence in the wider world, so perhaps the communists see it as a necessary evil.

http://www.dailyforex.com/forex-fundame ... -Den/10534


Obama must be feeling pretty pleased with himself.

[mellie]

For those of you who lost money in the last GFC, prepare to lose a lot more.

Hows your superannuation?

Too late I suspect.

Re- the Chinese/US currency war, the renminbi (RMB) is no longer a red herring or underdog ... as it's set to become a global currency and serious dollar rival.

What better time to launch the red dollar as a global currency ... with the greenback in turmoil.

"For years, policymakers thought it was not worth trying to get Beijing to stop manipulating the renminbi, yet that view was mistaken. They ignored the fact that the Chinese were undermining the consensus that the market should determine currency values.

Now it seems it is too late to rescue the system of free-floating currencies."

-Forbes

Redback Rising: China’s Bilateral Swap Agreements
and RMB Internationalization∗

http://faculty.maxwell.syr.edu/dmcdowel ... l_Liao.pdf

[mellie]

Was Julia Gillard’s visit to China, following last year’s agreement between the Reserve Bank and China’s central bank for a $30 billion currency swap agreement something Paul Keating invisioned many years ago perhaps?
At the time, It is was thought to be part of a determined effort by the Chinese authorities to develop the renminbi into a regional reserve currency.

Or perhaps a more ambitious and sinister prelude to a global currency war to compete with and undermine the greenback?

Is it a good thing for the world to be less dependent on the US dollar?

What will this mean for Australia?

Pro's -vrs- Con's .........anyone?

Or will this effect the global currency and economy in ways we are yet to understand.