China Sovereign Wealth Fund Says Renminbi Will Become Reserve CurrencySubmitted by Ian56 on Tue, 05/22/2012 - 17:18
It has been obvious for a while what China has been planning.
Moving away from the US dollar and encouraging the other Brics and Africa to do the same. Japan and Australia are also interested.
Now the head of China's Sovereign Wealth fund comes right out and says it.
The US currently runs a very substantial trade deficit and has done for many years.
The only reason it is able to do that, is by exporting dollars because it is the world's Reserve Currency.
If the rest of the world will no longer accept exported US Dollars, the US will not be able to run a trade deficit.
That would be a very considerable economic adjustment.
And no amount of Fed printing could change it - it would make it worse by decreasing confidence in the dollar still further.