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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

#171

Post by dogma1138 »

ameister14 wrote: post #157
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…

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 statemen…

No one said anything about trusting an opinion or a presented fact, you should always do your own research that's the point.

On a more anecdotal side the people I tend to "trust" the least at least on the internet are those who often come out with citations for everything and dump a huge wall of text.

The problem with the internet is that you can find a citation for everything, I can find that enough citations that lizard aliens are actually the ones who control the exchange rate of the Yuan to the Dollar using a weather machine.

The credibility of sources is also extremely hard to determine these days especially in subjects which are not your primary proficiency it's too easy to publish anything you want these days even in reputable sources.

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

#172

Post by wu-ikkyu »

Noos wrote: post #122
anc84 wrote: post #100

Earlier quoted context omitted.

* causes real bad things to happen Fixed that for you. Do I need to get the CIA and various wars lists from Wikipedia?

oh FFS, compare that to the cultural revolution, which ended in 1976. the whataboutism here is annoying; while we were debating and agonizing over the impact of the vietnam war, China was busy imprisoning, torturing, and relocating its own citizens over ideology. It created a culture of children informing on their own parents. I wish people would realize how much they have dodged a bullet by growing up in western nat…

>I wish people would realize how much they have dodged a bullet by growing up in western nations

The odds of catching a bullet are much higher in the US than China.

https://www.npr.org/sections/goatsandsoda/2017/10/06/5558618...

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

#173

Post by joyeuse6701 »

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…

Unfortunately I don't think currency and the decisions behind it can be divorced from politics, especially currencies tied to a government.

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

#174

Post by gcb0 »

Symmetry wrote: post #151
dmichulke wrote: post #133

Earlier quoted context omitted.

> 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.

the amount EU can buy increases as they print more Yaun. not the other way around as you suggested on the first sentence.

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

#175

Post by vonnik »

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 bad reporting. The amounts are too small to be meaningful in the currency markets.

In addition, China has enormous interest in maintaining the dollar as the reserve currency. Keeping the USD as reserve currency allows the US to borrow at very low rates, and borrowing at low rates is a pillar of its debt-driven economy. The US debt-driven economy is what makes a market for Chinese exports. And China's economy is basically exports plus infrastructure investments by state-owned enterprises. Take away the US for the exports and China has a huge problem. That's why it buys so many Treasuries.

There's also an argument to be made that the yuan is over-valued. It took a nose-dive when China briefly removed currency controls (last year?) because a lot of people wanted to move their money out.

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

#176

Post by gcb0 »

dogma1138 wrote: post #167
freeflight wrote: post #146

Earlier quoted context omitted.

> 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 devaluing it. So China is printing money to buy up the debt generated by the US printing money? I'm not an economist, but that does not sound like a reasonable way for a world economy to run on.

Things are much more complicated than this, but essentially China as a primary exporter wants to keep the value of it's currency as low as possible since the exporters then benefit on exchange rates. It also wants stability so it basically pegs the Yuan to the dollar, historically directly and more recently in directly (the Chinese central bank sets more or less of a fixed exchange rate but it does allow it to deviat…

but isn't buying bonds only useful if you want to return those USD with the prospect of getting more back later on (ideally above inflation)

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

#177

Post by coldtea »

nugi wrote: post #136
rjzzleep wrote: post #118

Earlier quoted context omitted.

I seriously doubt that. 5-10% of what? the _US population_? I'm pretty certain that 5%-10% of the population have more serious and pressing matters than worrying about their sexual preferences. luxury problems as they say.

I could not disagree more. If having a sexual identity is a luxury, I hate to think what actually enjoing life is. What a sad point of view.

And as far as "enjoying life" goes, it's an ever sadder view to place it anywhere aside from luxuries on a society were people are homeless, without healthcare, without steady jobs, working 2-3 jobs, and so on. Not to mention the huge loneliness and depression epidemic, with actual tangible effects on mental and physical health, and wether one can openly smack their partner and electrocute their body parts is quite far from a priority.

It's closer to the "right" to enjoy champagne and oysters than anything fundamental...

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

#178

Post by bluntfang »

jcranmer wrote: post #126
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...

> 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... Korea and Vietnam would beg to differ.

Korea and Vietnam are pretty regional, not global, but I think your point still stands.

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

#179

Post by romanovcode »

xir78 wrote: post #3

A few years ago I couldn’t tell you the name of a Chinese company off the top of my head, now I can not only rattle of a list, they’re companies I’ve worked with or have significant investments in companies in the US. I also have a roster of WeChat contacts. I also work with multiple ex-pats that fled fearing for their life due to persecution based on their religion (Falung Gong), and laugh at how freaked people are…

Yeah, and Snowden had so fun time and didn't had to flee and hide from U.S. for the rest of his life at all!

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

#180

Post by coldtea »

dctoedt wrote: post #110
coldtea wrote: post #93

Earlier quoted context omitted.

Or, maybe, compare Tianamen square with Kent state, the Chicago '68 democratic convention, and so on.

After both Chicago '68 and the Kent State shooting, there was immediate, extensive blowback in the American press and public. Quite the opposite happened in China after Tiananmen Square. (Of course, all of the above were decades ago, so we need to keep an open mind about the condition today in the respective countries.)

>After both Chicago '68 and the Kent State shooting, there was immediate, extensive blowback in the American press and public. Quite the opposite happened in China after Tiananmen Square.

I'd say after those it was business and usual, and those involved didn't get even a slap on the wrist. If anything, venting through the press merely let people get steam out and forget more easily....

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