Head Of China's Second-Largest Bank Says The United States Government Should Start Issuing Bonds In Yuan, Rather Than Dollars → Washingtons Blog
Head Of China's Second-Largest Bank Says The United States Government Should Start Issuing Bonds In Yuan, Rather Than Dollars - Washingtons Blog

Monday, June 8, 2009

Head Of China's Second-Largest Bank Says The United States Government Should Start Issuing Bonds In Yuan, Rather Than Dollars

George Soros said a couple of days ago that China’s global influence is set to grow faster than most people expect.

He might be right.

As the Telegraph writes today:

The head of China's second-largest bank has said the United States government should start issuing bonds in yuan, rather than dollars, in the latest indication of the increasing importance of the Chinese currency.
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  1. actually, as we've already been issuing them in U.S. grade 'AAA' CHARMIN, we could issue them in other more negotiable than the dollar denominations, such as Cracker Jack 'prizes' or maybe in 'payable in monopoly money only' versions. I'm sure the Chinese loved the CHARMIN version, sure beats that crepe paper stuff they have over most squatting holes in China.

  2. Sure, let's make US debt subservient to the Chinese currency. If we ever did this we would deserve the complete collapse of the US economy. What a stupid idea.


  3. Anonymous - you are already subservient to the the chinese money - you just don't realise it yet.
    US false prosperity has only occurred because of the preparedness of foreigners to finance and lend the money for the population's over consumption. Massive deficits ballooning into the future has created the environment where foreigners appetite for US debt is declining - the saying "beggars can't be choosers" now applies to the US as who will finance the over consumption? - US has little savings to draw from.
    The pink elephant in the room is that the US debt levels now guarantees "banana republic" status, but everyone is too scared to mention it as it will cause a stampede to the exit. Foreign countries are working out ways to divulge their "stinky" greenbacks without causing price implosions.
    Remove world reserve currency status from the US and the US will have no choice but to be subservient to its creditors.

  4. Without the US willingness to dismantle its industrial base and invest in China, where would the Chinese be?

    They haven't exactly stepped up to the plate militarily wise either.

    We live in interesting times...

  5. The Chinese are getting the feeling they are the lee harvey of the US ponzi scheme. They are not amused. At some point someone is going to kick the chess board.

  6. 2 wars ruined Britain and USA gained by be the only power left unscathed,with no military threat, economic and industrial rival. The dollar was the world's currency and within fifties years your left with a giant financial parasite over the back of industrial growth. That is the only way forward- and nationalizing your bank like North Dakota would be a start.

  7. Ha, ha, ha ha ha!

    Those whom the gods would destroy they simply grant their wishes.

    Maybe I'm channeling Chinese bankers but I myself was thinking of the advantages of the Treasury issuing debt in Yuan ... such as every time the PBOC shoots its collective mouth off about some nonsense such as IMF drawing rights becoming a currency.

    The Treasury could issue Yuan bonds (YB's) and do two things; a) refuse to divulge the amount of supply or understate it as the PBOC does with its holdings and b) sell YB's overseas, say to Japan or Eurozone.

    If the Chinese won't subject their currency to market forces then the US can do it for them. Then the market can determine if the Chinese are being truthful about the amount of reserves they hold, their 'printing rate' and the total amount of unredeemable assets the Chinese hold against their reserves.

    I suspect the Chinese are as insolvent as everyone else - as a result of real estate overbuilding and freebies to the well- connected cronies - and cannot service their internal debts ... irrespective of external reserves.

    It may come to this as the Treasury is set to engulf the world with USA sovereign debt, denominating in Yuan would make that bitter pill go down easier.


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