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Deutsche Bank becomes first foreign yuan clearing bank in Europe

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Re: Deutsche Bank becomes first foreign yuan clearing bank in Europe

#181

Post by friendzis »

WJW wrote: post #65
pizzathyme wrote: post #22

The US wields incredible negotiating power and hegemony because the dollar is the world’s reserve currency. Like the British pound and the Dutch guilder before it, if that loses reserve currency status it will be harder to borrow on favorable terms, which would affect the entire US economy. This is a big step in that perhaps starting to happen over the next few decades.

I think this has the causality reversed. The dollar is the world's reserve currency because the US wields incredible negotiating power and has been the de facto military hegemony in the past few decades. It seems likely that the dominance the US has enjoyed in the recent past will diminish somewhat as other blocks with larger population bases catch up on the technology and industrialization fronts, and eventually sta…

> I think this has the causality reversed.

Originally, yes. The US dollar did become a reserve currency because because of the circumstantially huge negotiating power of the USofA, however, as it stands now, the negotiating power is dependent on the dollar being reserve currency. The US is running on a consistent trade deficit, which is supported by the dollars covering economic growth outside of US.

When self-supporting systems are thrown off-balance, the sign in the feedback loop tends to reverse.

Re: Deutsche Bank becomes first foreign yuan clearing bank in Europe

#182

Post by vrganj »

Markoff wrote: post #166
vrganj wrote: post #140

Earlier quoted context omitted.

As a Western analogy, GBP has similar levels of formality: Reminbi ~= Pound Sterling Yuan ~= Pound Kuai ~= Quid

Is quid really used in UK by 80-90% people? I thought it's very informal slang word (of some lower educated people), in China most of the people just use kuai (well I guess not bank tellers).

Pretty much everyone uses it in informal settings in my experience.

In a professional environment, people usually say pound.

The distinction is context-based, not class- or education-based.

It's my understanding the same is the case for kuai vs yuan as well?

Re: Deutsche Bank becomes first foreign yuan clearing bank in Europe

#183

Post by thelastgallon »

codedokode wrote: post #113
jillesvangurp wrote: post #57

Earlier quoted context omitted.

One consequence of the transition to renewable energy and electrified transport, is that oil imports will start to decline. And the dollar is of course the currency of choice for that. The US economy and other countries that export fossil fuels will feel the impact over the next decade or so. The energy transition might go a lot quicker than people seem to expect. Currently about 20% of global car sales is electric.…

What's good in electric cars? If a large power plant is destroyed how are you going to charge your electric car to escape?

There is no need of large powerplants. Thats the legacy grid, only to make Warren Buffet rich. New grid (that needs to be built) will have solar panels, BESS + EVs for storage, either off-grid or a small community grid. The new grid is distributed and indestructible.

Re: Deutsche Bank becomes first foreign yuan clearing bank in Europe

#184

Post by vel0city »

mschuster91 wrote: post #153
wyre wrote: post #130

Earlier quoted context omitted.

What are you afraid of happening? This is such a perverse and anxious fear imo

A reasonable scenario might be a cyberattack taking down large portions of the grid for a prolonged time. It's not impossible to achieve something like that, Stuxnet proved the concept of corrupting PLCs driving powerplants ages ago. Alternatively, even outside a cyberwar scenario, bad weather has been shown to take down power grids for entire regions for days, sometimes weeks.

If they've taken down large portions of the grid for a prolonged period of time you're also not going to have much gasoline left.

> bad weather has been shown to take down power grids for entire regions for days, sometimes weeks

Once again, as someone who actually lived through those scenarios multiple times, when the gas pumps go down you're usually shit outta luck on getting gas.

When the grid goes down for days, the gas you have in your gas car + any random fuel tanks you have in your garage is what you have. Don't expect anything else unless you plan to take it at gunpoint.

Re: Deutsche Bank becomes first foreign yuan clearing bank in Europe

#185

Post by WarmWash »

budsniffer952 wrote: post #77
pizzathyme wrote: post #22

The US wields incredible negotiating power and hegemony because the dollar is the world’s reserve currency. Like the British pound and the Dutch guilder before it, if that loses reserve currency status it will be harder to borrow on favorable terms, which would affect the entire US economy. This is a big step in that perhaps starting to happen over the next few decades.

Losing the reserve currency doesn't happen in a vacuum. It happened to the British and Dutch because their empires were dismantled. So, yeah, it could happen to the US, slowly, over time (it already is). But nobody wakes up tomorrow and says they no longer want USD. Where are you parking the money, yuan?

It seems that people forecasting the collapse of the dollar are mostly doing it from a social perspective i.e. "America is collapsing under the weight of private healthcare, anti-immigration, tariffs, and the erosion of our allies; the dollar is done for"

But the reality is that financial markets don't really have a soul, and just care about economics. By all accounts, the American economy is doing excellent right now and dollars are still in heavy demand.

Re: Deutsche Bank becomes first foreign yuan clearing bank in Europe

#186

Post by kanwisher »

maxglute wrote: post #179
pizzathyme wrote: post #22

The US wields incredible negotiating power and hegemony because the dollar is the world’s reserve currency. Like the British pound and the Dutch guilder before it, if that loses reserve currency status it will be harder to borrow on favorable terms, which would affect the entire US economy. This is a big step in that perhaps starting to happen over the next few decades.

USD exorbitant privilege is mostly just exorbitant now that sanction evasion solved problem due to US going ham. Central banks pulling out of treasuries, rates increase selling to institutional vs marginal buyers, USD just terminal debt serving sink hole now. Ironically PRC can now lend out USD from their reserves and trade surplus at better rates than FED... the answer to USD in meantime for PRC is PRC USD, every do…

how could yuan be a reserve currency when its not even legal for its citizens to move it out of the country beyond $50k a year. they have extreme currency controls

Re: Deutsche Bank becomes first foreign yuan clearing bank in Europe

#187

Post by tgv »

victorbjorklund wrote: post #53
BaardFigur wrote: post #48

Not a good thing. China is an authoritarian regime, which we need to reduce dependency on, not increase it.

We also need to reduce our depency on USA which is currently signaling it is a hostile nation that consider and invasion of Europe in the form of an occupation of Greenland. It is possible USA:a admin is just lying about their hostile intentions but that in itself is a reason to reduce dependence on America

> We also need to reduce our depency on USA

True, but trading the USA for China is not a wise move, if only because China would never ever have stepped up in WW2, and will not provide any support in the future either, except --Buddha willing-- by selling arms.

Re: Deutsche Bank becomes first foreign yuan clearing bank in Europe

#189

Post by WJW »

noir_lord wrote: post #141
WJW wrote: post #70

Earlier quoted context omitted.

The obvious counterexample would be the previous most powerful empire in the world (ie the UK) ceding that title to the USA after collapsing after WW2? No war between the UK and the US was needed.

> No war between the UK and the US was needed. No war was "needed" to settle who was #1, it was clear that we (the UK) simply couldn't maintain the empire as it was and we definitely couldn't have fought the US. We went into WW2 the clear naval power in the world, We exited it in the #2 spot utterly broke. In less than 4 years the US produced enough ships to eclipse our navy and did it while also producing ridiculous…

I agree. My point in the GP was that great power transitions are not ALWAYS accompanied by war between the new power and the previous one, as the Thucydides trap argument seems to imply.

War is costly, so (in the absence of bargaining frictions) game theory suggests that an agreement can be reached that leaves both parties better off compared to going to war.

Re: Deutsche Bank becomes first foreign yuan clearing bank in Europe

#190

Post by brodo »

BaardFigur wrote: post #48

Not a good thing. China is an authoritarian regime, which we need to reduce dependency on, not increase it.

I think other nations are not asking themselves which country has the best human rights record. That time has passed. Trump and Putin have pushed the world back to pure power politics. All the middle powers want to be less open to US blackmailing by diversifying. They know China is not their friend, but the US isn't either, and China is more predictable.
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