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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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    U.S. Takes Step Toward Support for China's Reserve-Currency Bid

    Proven
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    • Post n°1

    U.S. Takes Step Toward Support for China's Reserve-Currency Bid Empty U.S. Takes Step Toward Support for China's Reserve-Currency Bid

    Post by Proven Sun 27 Sep 2015, 2:40 pm

    U.S. Takes Step Toward Support for China's Reserve-Currency Bid

    The Obama administration took a step toward backing China’s bid to have the yuan recognized as a global reserve currency, as the U.S. softened its insistence that the Chinese implement financial reforms to win support.

    The International Monetary Fund is reviewing whether the yuan should be included in its Special Drawing Rights, a basket of reserve currencies used by the lender as a unit of account. After U.S. President Barack Obama and Chinese President Xi Jinping met Friday in Washington, the two sides issued a statement saying the U.S. supports the inclusion of the yuan “provided the currency meets the IMF’s existing criteria in its SDR review,” a point Xi highlighted in his press conference with Obama.

    The shift in the U.S. position follows the administration’s failed attempt to prevent allies from joining the China-led Asian Infrastructure Investment Bank earlier this year, a strategy that was faulted by former policy makers including ex-Treasury Secretary Henry Paulson.

    In June, a joint statement by the two countries said the U.S. “supports China making the reforms that would lead to the inclusion” of the yuan in the basket. Friday’s statement mentions U.S. support for “China’s commitment to implement further financial and capital market reforms.” The new language clarified to the Chinese that the IMF’s assessment of whether the yuan meets the fund’s SDR criteria will be the determining factor for American support, said an administration official who asked not to be identified.

    Winning the IMF’s endorsement would validate efforts by Xi to push through policies aimed at making the world’s second-biggest economy more market-oriented, boosting China’s prestige as it prepares to host Group of 20 gatherings next year. At least $1 trillion of global reserves will convert to Chinese assets if the yuan joins the IMF’s reserve basket, according to Standard Chartered Plc and AXA Investment Managers.

    “The train delivering the SDR to President Xi in time for the November 2016 G-20 Summit in Hangzhou remains on schedule,” said David Loevinger, managing director of emerging-markets sovereign research at asset manager TCW Group Inc. in Los Angeles. There’s “plenty of wiggle room” within the IMF criteria to allow China to meet the fund’s requirements, said Loevinger, a former senior coordinator of China affairs at the U.S. Treasury.

    The IMF’s executive board will make a decision on the yuan reserve-currency issue as soon as November. Approval requires 70 percent of the fund’s voting shares, and even if the U.S. opposed the move, the nation would need several allies because the U.S. has about 17 percent of votes. Many analysts have been predicting approval.

    The U.S. and China also look forward to continuing to discuss methods to facilitate yuan trading and clearing in the U.S., according to the joint statement.

    U.S. Treasury Secretary Jacob J. Lew in previous comments this year has put the onus on China to prove the yuan belongs, saying the country needs to further liberalize its currency policy and complete financial reforms before it can get the IMF’s nod.

    Friday’s shift brings the U.S. closer to the positions of the U.K. and France. In a speech Tuesday in Shanghai, U.K. Chancellor of the Exchequer George Osborne said he’d like to see the yuan added to the IMF basket as the currency becomes increasingly important in global markets and “meets existing IMF criteria.”

    French Finance Minister Michel Sapin said last week in Beijing that France favors including the yuan in the SDR basket, though China still needs to meet the IMF’s technical requirements first, according to Francois Coen, Sapin’s spokesman.

    http://www.bloomberg.com/news/articles/2015-09-25/u-s-takes-step-toward-support-for-china-s-reserve-currency-bid
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    • Post n°2

    U.S. Takes Step Toward Support for China's Reserve-Currency Bid Empty Re: U.S. Takes Step Toward Support for China's Reserve-Currency Bid

    Post by Proven Sun 27 Sep 2015, 2:50 pm

    Inclusion of the Yuan in the SDR basket means that the Yuan is no longer pegged to the US dollar.

    It could not become part of the SDR basket if it was pegged to the dollar, because including a "pegged" Yuan would be equivalent of giving the dollar a larger slice of the basket percentage.  

    Since China builds foreign reserves through exports, the Yuan will move higher against the dollar.  A higher Yuan means all goods exported from China to the US will rise in price.  Resulting in inflation in the US.  

    There is more to this than Bloomberg is explaining.  
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    U.S. Takes Step Toward Support for China's Reserve-Currency Bid Empty Re: U.S. Takes Step Toward Support for China's Reserve-Currency Bid

    Post by wciappetta Sun 27 Sep 2015, 4:00 pm

    Since China builds foreign reserves through exports, the Yuan will move higher against the dollar.  A higher Yuan means all goods exported from China to the US will rise in price.  Resulting in inflation in the US.  

    Unless they control value by diluting the hard assets via increased Yuan supply call it La-choy QE, they swing American. They make money keeping the Yuan cheap. All that needs to happen for US inflation is for oil prices to rise or for more global trade to be conducted in something other than dollars.... It's a big deal because someone is trying to shift the center of the global economic system from the US to the IMF and UN...once that happens the strength of the US will weaken, the sad thing is it is being done on purpose.


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    U.S. Takes Step Toward Support for China's Reserve-Currency Bid Empty Re: U.S. Takes Step Toward Support for China's Reserve-Currency Bid

    Post by Proven Sun 27 Sep 2015, 4:51 pm

    wciappetta wrote:
    Since China builds foreign reserves through exports, the Yuan will move higher against the dollar.  A higher Yuan means all goods exported from China to the US will rise in price.  Resulting in inflation in the US.  

    Unless they control value by diluting the hard assets via increased Yuan supply call it La-choy QE, they swing American. They make money keeping the Yuan cheap. All that needs to happen for US inflation is for oil prices to rise or for more global trade to be conducted in something other than dollars.... It's a big deal because someone is trying to shift the center of the global economic system from the US to the IMF and UN...once that happens the strength of the US will weaken, the sad thing is it is being done on purpose.

    Oil will rise, but with a strengthen Yuan, it will be relatively cheaper for China to import oil.  

    The purpose of this "reset" is to make labor costs in the west equal to the east. The IMF wants the West to support the rise of Asia in the 21st Century.  

    The dollar will have a way to go before not being the reserve currency.  This does not mean it will not devalue first.  Just like the Pound Sterling
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    U.S. Takes Step Toward Support for China's Reserve-Currency Bid Empty Re: U.S. Takes Step Toward Support for China's Reserve-Currency Bid

    Post by wciappetta Mon 28 Sep 2015, 6:54 am

    For the Chinese this is a tight rope balancing between their export economy and their political maneuvering to pry influence out of the hands of the US. Everyone know China wants the US out of the region and this is a huge step in that direction.

    The ramifications make this two edged sword dicey, if the dollar devalues, Europe follows that in order to keep the balance and maintain the exchange rate formula fostering the trade relationship. In that example is where it could be concerning to China since Europe is a large importer of Chinese goods.

    On the other hand, with the downturn in China's economic growth, support for their economy via reserve currency status would be a boost right now ... international economics is fascinating and a balancing act...


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    U.S. Takes Step Toward Support for China's Reserve-Currency Bid Empty Re: U.S. Takes Step Toward Support for China's Reserve-Currency Bid

    Post by Neno Mon 28 Sep 2015, 11:14 am

    Think PINK & YELLOW.... laugh
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    U.S. Takes Step Toward Support for China's Reserve-Currency Bid Empty Re: U.S. Takes Step Toward Support for China's Reserve-Currency Bid

    Post by Proven Tue 29 Sep 2015, 11:58 am

    China Hopes for Good News on IMF Currency Basket -Chinese Official 

    U.S. Takes Step Toward Support for China's Reserve-Currency Bid Logo


    U.S. Takes Step Toward Support for China's Reserve-Currency Bid 2015-09-17T081546Z_841747076_GF10000207732_RTRMADP_3_CHINA-ECONOMY-POLICY-1024x702




    Washington. China is well placed to meet the criteria for inclusion in the International Monetary Fund's benchmark currency basket, the country's representative at the international lender said on Friday.


    Beijing has launched a major diplomatic push for the yuan's inclusion in the IMF basket as part of its long-term strategic goal of reducing dependence on the dollar and France said on Friday it would back the bid.


    Jin Zhongxia, executive director for China on the IMF's policymaking board, said China would respect the IMF's decision on whether to include the yuan currency in the Special Drawing Rights (SDR) basket, but was hoping for a positive outcome.


    The yuan, also known as the renminbi, was already ranked as a top exporting currency, he said.

    "More importantly, China can potentially satisfy all of the operational requirements for being a reserve currency in the SDR basket," Jin said at an Atlantic Council event.


    China had an active currency market, had recently liberalized interest rates and opened interbank bond markets and would soon open its currency market to foreign institutions, he said.

    The IMF's executive board is scheduled to decide in November whether to add the yuan to a basket of currencies comprising dollars, euros, pounds and yen.


    One of the criteria is that the yuan be "freely usable," or widely used to make international payments and readily traded on foreign exchange markets.

    Jin said the currency may be nearing its equilibrium exchange rate. China has been using foreign exchange reserves since mid-2014 to support the yuan after pressure on the currency intensified since a surprise devaluation on Aug. 11.


    The move sparked turbulence on global markets and was one reason the U.S. Federal Reserve cited as driving its decision to refrain from hiking rates on Thursday. But Jin said the market reaction, while possibly "irrational," also showed the importance of the currency.


    "This is rare, even for some of the SDR basket currencies. So clearly if the renminbi is not that important, the world would not bother to pay so much attention," he said.


    Reuters

    http://jakartaglobe.beritasatu.com/international/china-hopes-good-news-imf-currency-basket-chinese-official/
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    U.S. Takes Step Toward Support for China's Reserve-Currency Bid Empty Re: U.S. Takes Step Toward Support for China's Reserve-Currency Bid

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