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Europe’s central banks are starting to replace dollar reserves with the yuan

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Re: Europe’s central banks are starting to replace dollar reserves with the yuan

#151

Post by Symmetry »

dmichulke wrote: post #133
dogma1138 wrote: post #58

Earlier quoted context omitted.

Europe can buy all the yuan in the world and it won’t have any effect. The exchange rate between the dollar and the yuan is set by the rate at which China is buying US debt not by the global markets. China prints money to buy US debt it allows China to devalue its own currency without devaluing its assets and this deal allowed the US to pretty much generate as much currency as they want through cheap debt without dev…

> Europe can buy all the yuan in the world and it won’t have any effect. That is entirely wrong. There is only a limited amount of Yuan, so by definition the supply of Yuan is affected, no matter in which currency it is bought. Therefore, the price is affected as well. Will wheat in USD get more expensive if I buy all your wheat with Ruble? You bet it will.

The amount of Yuan isn't literally infinite but China can print new Yuan a lot faster than Europe can buy it up and, in practice, would absolutely need to in response to extra European demand so as to not suffer from a deflation induced depression.

Re: Europe’s central banks are starting to replace dollar reserves with the yuan

#152

Post by tylerhou »

slivym wrote: post #78
sremani wrote: post #33

>>In June, the European Central Bank announced that it had exchanged €500 million ($611 million) worth of US dollar reserves into yuan securities. This was a small shift—the ECB has €44 billion in foreign exchange reserves Before declaring fall of USA, blaming Trump for apocalypse and anointing Xi as the new Emperor, lets take step and really see the numbers. $611 million is a marginal amount when we are talking abou…

This is kind of ridiculous. The purpose of reserves is not to send political messages. It's to provide a mechanism to manage monetary policy and it does that through buying back its liabilities. To do this effectively you must hold a strong currency as your reserve- there's no point holding Zimbabwe dollars. So any reasonable reserves for a European country today will be part Dollar, Pound, Yen and Yuan. How much of…

> It's not a good sign for the US

IMHO this isn't necessarily true. A weaker dollar could mean stronger exports.

Re: Europe’s central banks are starting to replace dollar reserves with the yuan

#153

Post by jacobush »

kuschku wrote: post #59
foepys wrote: post #49

Earlier quoted context omitted.

You cannot just "create" a federal Europe. This naive view is why the Middle East is in a constant state of looming (civil) war. British and French colonists drew state lines without considering tribes and cultures and now those tribes are fighting over control in countries they don't even want to be a part of.

The alternative is China controlling everything, and us being delegated to the back benches. I'd rather fight with the other european countries over such small details than live in a world ruled by an autocratic China.

The Balkan wars were fought over such small details. It could easiliy go badly in Europe at large (again...) and then China would gain from that situation too. Do you think they would be too shy to help some warring faction or other? They tried in Yugoslavia and that was back in the 90s!

Re: Europe’s central banks are starting to replace dollar reserves with the yuan

#154

Post by kiliantics »

mieseratte wrote: post #121
moltar wrote: post #120

Earlier quoted context omitted.

Just a reminder that slavery was abolished in 1865, 153 years ago. And recently, lots of laws have been passed restricting freedom. NSA has been watching your every move. The west only has freedom on paper. And countries change and adapt.

> The west only has freedom on paper. Let me know when they start black-bagging dissidents for speaking up a bit too much. There are festering problems regarding surveillance in the West, and the prison system is a bit much here in the US, but "freedom on paper" is a load of BS.

You can only truly believe this if you have never been an open and active supporter of non-conforming (and threatening to status quo) beliefs or are not black/brown. McCarthyism and antiblackness are still very much built into the functioning system of western nation states.

Re: Europe’s central banks are starting to replace dollar reserves with the yuan

#155

Post by dogma1138 »

ethbro wrote: post #145
dogma1138 wrote: post #109

Earlier quoted context omitted.

This isn't something that can be put into a single paragraph, the top 3 results from Google seem to provide decent sources of information https://www.thebalance.com/dollar-to-yuan-conversion-and-his... https://www.thebalance.com/how-does-china-influence-the-u-s-... https://www.cluteinstitute.com/ojs/index.php/IBER/article/do... However I haven't read them thoroughly, so I suggest you invest some time in doing some re…

Unfortunately, what you suggest is a circular set of actions. Why would I read comment sections if I'd already had the time and been able to find high quality sources to learned about the topic? If you don't feel like citing sources, or don't have any good ones handy, saying so is fine. But even providing the right terms to search can be helpful!

The search terms I've used were "Yuan dollar relationship" I'm not entirely sure if these are the best terms to use in this case but these were the ones with the least amount of confirmation bias, so you'll only have to deal with the usual search engine bias.

Re: Europe’s central banks are starting to replace dollar reserves with the yuan

#156

Post by b0rsuk »

rospaya wrote: post #62
mc32 wrote: post #7

I like Japan --I think for a mid-sized country they have done well for themselves... but their representation in foreign reserves is a bit outsized. The Yuan, given China's economic strength, has nowhere to go but up. We'll have to see how European Central banks like that in 10-20 years when they exert more influence on policy.

> I like Japan --I think for a mid-sized country they have done well for themselves Japan is the third or fourth largest economy and the 11th most populous country in the world. Nothing middle about it.

To put it in context, Russian Federation has only 15% larger population. Japan's population is 39% of US. Japan is pretty big, even if only 61th by area.

Re: Europe’s central banks are starting to replace dollar reserves with the yuan

#157

Post by ameister14 »

dogma1138 wrote: post #109
NicoJuicy wrote: post #82

Earlier quoted context omitted.

Do you have a source or reference where i can get a deeper information/knowledge about the relationship between the dollar, yuan and bonds?

This isn't something that can be put into a single paragraph, the top 3 results from Google seem to provide decent sources of information https://www.thebalance.com/dollar-to-yuan-conversion-and-his... https://www.thebalance.com/how-does-china-influence-the-u-s-... https://www.cluteinstitute.com/ojs/index.php/IBER/article/do... However I haven't read them thoroughly, so I suggest you invest some time in doing some re…

I think a lot of the problem is I can't trust your reputation unless I know you or you have some other proven characteristics to help create that trust. There are a few people on HN like that, but it's rare. In real life if you present an opinion I know what you do for a living and potentially how educated that opinion is. On the internet I don't.

That means that if you're an econ PhD and you tell me a basic statement, I'll trust it in real life. On the internet you'd have to prove you're a PhD first. It really does limit the conversation we can have. A lot of the time I find myself talking to someone (or arguing with them) and realizing they don't have the framework to hold the conversation - they'd need to read a half dozen books and do some intensive study because they want to work through problems that have already been solved.

Re: Europe’s central banks are starting to replace dollar reserves with the yuan

#158

Post by Symmetry »

dogma1138 wrote: post #58
sremani wrote: post #33

>>In June, the European Central Bank announced that it had exchanged €500 million ($611 million) worth of US dollar reserves into yuan securities. This was a small shift—the ECB has €44 billion in foreign exchange reserves Before declaring fall of USA, blaming Trump for apocalypse and anointing Xi as the new Emperor, lets take step and really see the numbers. $611 million is a marginal amount when we are talking abou…

Europe can buy all the yuan in the world and it won’t have any effect. The exchange rate between the dollar and the yuan is set by the rate at which China is buying US debt not by the global markets. China prints money to buy US debt it allows China to devalue its own currency without devaluing its assets and this deal allowed the US to pretty much generate as much currency as they want through cheap debt without dev…

You could make the claim that China was devaluing its currency in 1995 but since then the Yuan has been gaining in value relative to the dollar.[1] I think that became a talking point back when it was true and people have just been repeating it ever since without reexamining.

[1]http://www.macrotrends.net/2575/us-dollar-yuan-exchange-rate...

Re: Europe’s central banks are starting to replace dollar reserves with the yuan

#159

Post by oblio »

dash2 wrote: post #105
coldtea wrote: post #89

Earlier quoted context omitted.

Especially since throughout the 20th and 21st century, it wasn't China who was a constant global cop/aggressor, invading countries, spreading "democracy", meddling in Latin America, Asia, Middle East AND Europe, and so on...

China did not have the power before. Who knows how it will act when it does? It's treatment of Tibet, invaded in 1948 and still occupied, is not encouraging.

It used to have this power and it turned all the countries in its neighborhood into tributary states. Which, all things considered, was not that bad, since it was overall a peaceful and stable relationship.

Hard to say how Communist China as a superpower will differ from Imperial China, though...

Re: Europe’s central banks are starting to replace dollar reserves with the yuan

#160

Post by kiliantics »

mcv wrote: post #115
coldtea wrote: post #92

Earlier quoted context omitted.

> Religious persecution doesn’t disappear just because of economic growth. Neither does discrimination against sexual preferences (+). That’s the fear expressed above. The hypocrisy of a country that props constant wars all around the globe, has bombed/invaded 3-4 countries in the last 20 years alone, and constant meddling and manipulations of other governments for its "interests", that had segregation up to the 70s,…

I agree that the United States' run as the world's biggest superpower has been far from perfect. I criticise the US a lot. And I actually consider China to be one of the few countries that is not governed by amateurs. China gets a lot of things right. The one big problem, though, is that China does not believe in freedom. At all. Censorship, no free press, no freedoms of opinion, expression, religion, etc. And they s…

US has only ever been about securing freedom for a small and privileged minority of people, usually at great cost to people outside that group
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