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View Diary: China Cuts US Credit Rating. Obama Cuts Hawaii Vacation Short. (171 comments)

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  •  Also, China has done 1.6 trillion yuan in (1+ / 0-)
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    currency  swaps with 18 countries around the world (about 160 billion US$). Other countries such as India/Japan have also done swaps. Many of these have now become permanent deals. These swaps reduces the amount of US$ required to be held in reserves.
    Experts: Chinese Yuan Destined to Become More Dominant

    China’s rising economic trajectory means the yuan could eclipse the dollar as the world’s top currency, experts say.
    “There are many uncertainties about how the U.S. will respond to the dollar’s possible loss of dominant status,” he said. “We are therefore not sure whether the transformation of international monetary system will take place smoothly and peacefully.”

    •  I didn't mention that, but of course, (1+ / 0-)
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      Claudius Bombarnac

      ...currency swaps are exploding and entire regions, like South America, are avoiding the Dollar in trade as much as possible. So much, in fact, that the US has sunk to number 3 as a trading partner for them in just the past year. Reducing trade with the US means you don't have to accept Dollars or hold risky Dollar reserves in large amounts.

      After the petrodollar falls away, the US trading advantage will come down to murder weapons and weapons of war -- their chief export and the foundation of their GDP. I see that as sustainable in that the American culture came into existence only after the invention of the gun -- and knows no other reality or history. It is the foundation and identity of that culture and it is what they do best. Plus, the technology is subsidized with more than half of all government revenues, making it a nation driven enterprise both in supply AND demand.

      Denial is a drug.

      by Pluto on Wed Dec 26, 2012 at 01:30:55 PM PST

      [ Parent ]

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