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Author: desertdaveataol Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 465263  
Subject: Displacing the dollar Date: 10/4/2012 11:20 AM
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Analysis: China's currency foray augurs geopolitical strains

(Reuters) - "It's our currency and your problem," U.S. Treasury Secretary John Connally famously said of the dollar in 1971.

More than 40 years later, China is doing something about it.

Fed up with what it sees as Washington's malign neglect of the dollar, China is busily promoting the cross-border use of its own currency, the yuan, also known as the renminbi, in trade and investment.

The aim is both narrowly commercial - to reduce transaction costs for Chinese exporters and importers - and sweepingly strategic.

Displacing the dollar, Beijing says, will reduce volatility in oil and commodity prices and belatedly erode the ‘exorbitant privilege' the United States enjoys as the issuer of the reserve currency at the heart of a post-war international financial architecture it now sees as hopelessly outmoded.

<snip>

http://www.reuters.com/article/2012/10/03/us-economy-global-...
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Author: PeterRabit Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 405291 of 465263
Subject: Re: Displacing the dollar Date: 10/4/2012 12:48 PM
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That ‘exorbitant privilege' is the primary reason we have trouble avoiding trade deficits and the loss of manufacturing.

Like recreational drugs: fun in the short run, deadly in the long run.

Peter

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Author: MrPlunger Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 405297 of 465263
Subject: Re: Displacing the dollar Date: 10/4/2012 2:52 PM
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It's China causing the exhorbitant privelege by buying USD to keep the Yuan down.

Their rhetoric is so transparent.

Does anyone really think they want their Yuan propped up to uneconomic levels till they can't export any more?

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Author: bjchip Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 405307 of 465263
Subject: Re: Displacing the dollar Date: 10/4/2012 7:44 PM
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New Zealand signed on in 2011, it was big news here of course. So I have known about what China is doing. I think it is a "good idea" for them of course, and probably a good idea for the rest of the world as well.

The impact on the US economy is bound to be severe as they gain traction.

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