With the current economic uncertainty in the USA, China Makes a Bet Against the US Dollar as World Reserve Currency is becoming much more relevant. There are a number of reasons for China’s action, and the reason is, that the US is playing with the development of their economy and has undermined its hard earned money.
The dollar has been debased in value, and the United States of America has never suffered worse than it has now, ever. People in the USA no longer trust the dollar and are purchasing goods in other currencies as a result. This is only hurting the American people, and the problem is not going to go away anytime soon.
The dollar has no reason to appreciate any further and to continue to weaken it would be detrimental to the US economy. So, you see, China makes a bet against the US Dollar as World Reserve Currency.
So, as soon as the dollar appreciates too far, China will begin to buy the US dollar and the day of reckoning will be here. China Is becoming increasingly involved in the world economy and therefore, will cause some damage.
But, the risk is that China’s actions could cause the USD to fall even further and the US to suffer more damage. Therefore, China makes a bet against the US Dollar as World Reserve Currency.
I believe this prediction is coming true, as the value of the US dollar continues to depreciate and the American people are very upset about it. The Federal Reserve will undoubtedly raise interest rates soon, and this will create even more problems for the US economy.
What would the consequences be? Well, the currency war will continue as the US dollar falls further, and it would certainly result in deflation, and perhaps further inflation.
And, the idea of China making a bet against the US Dollar as World Reserve Currency is ironic. The Chinese are one of the most pro-US countries, they are members of the G20 and the World Bank, so why is China making a bet against the US dollar as World Reserve Currency?
Perhaps they feel it is time to change the course of the USA and the direction it is heading, so they may just have something to show for their action. It is just too bad that the current American leadership has given up trying to lead by example and allowed the dollar to fall too far and take too many risks, and become reckless.
In many ways, the US dollar is the worst kind of currency because it lends itself to manipulation. The US Government can easily manipulate the dollar, and that is why the dollar is rapidly losing its value.
Is it possible that China makes a bet against the US Dollar as World Reserve Currency? Yes, and you will be hearing more about this soon.