Posted by Geekette 17 hours ago
It’s a totalitarian state who has been jailing its wealthiest businesspeople on a whim, causing many to flee, and it’s about to embark on an invasion of its peaceful neighbor.
Which part of any of that screams “that currency will be a stable place to store my money?”
Most of the Asian countries (except South Korea, Japan and Taiwan) and African countries. They’re already getting tons of investments and loans from China.
Also, here you can see the change in the foreign exchange reserves by currency: https://en.macromicro.me/charts/116488/global-official-forei...
US Dollars: 71% -> 58% Chinese Yuan: 0 -> 2%
China is an empire. It cannot survive except through expansion so betting it will expand is like betting a person will breathe tomorrow.
Accepting Chinese currency is like France buying Nazi bonds in 1939 (which France and most European countries did, btw). It seems like, in fact it is, the height of stupidity, but it's amazing what a little bit of promised money can make people do.
This is figuratively, and potentially literally, paying for the bullets that will end up lodged in your skull, because the shooter promises 10% return. Which of course, these states will gladly do.
Ah you're a communist idealist who "won't go into details" (and you'll probably refuse to discuss why almost every attempt at communism ended in a massacring dictatorship ...)
Gaza, claimed victims (hamas numbers, rounded up): 65'000 dead. (note that these numbers are ridiculous: for example, did you know, Israel did not kill a single hamas member? Zero. Not a single one)
Gaza, claimed victims, IDF numbers: 13'000 dead (a little under half claimed to be hamas members. >80% are fighting age men)
(and let's not forget the other difference: in the victims of Hamas, >85% are civilians. And that's assuming that everyone, on duty or on holiday, working even indirectly for the military counts as a soldier, including locksmiths and cleaning staff, otherwise it's easily over 90%)
So let's say it's somewhere between those two numbers. But every conflict in the area is bigger than the biggest numbers in Gaza, easily.
Syria, right next door, death toll: 656'000 dead.
Sudan, not that far from Gaza, with hamas' parent organisation the perpetrators: 300'000 dead.
Lebanon (note: conflict started by the PA, against Christians), death toll: at least 150'000 dead.
IS/Daesh (note: conflict started by Palestinians), death toll: 306'000.
Xinjang: 1.2 million imprisoned, 10% dead, per year, according to UN. Obviously that would make it more than double the claimed Gaza death toll PER YEAR (so that would make it 4x as big during the Gaza conflict, except it's been going on for far longer than the Gaza war). As for official figues: https://id.china-embassy.gov.cn/eng/sgdt/202206/t20220622_10...
It's also notable that China is pretty much the only game in town for sustainable, renewable energy, so we have a choice between the U.S. (extinction) and China (survival?).
> Hong Kong is annexed
Hong Kong was taken over by the British after the opium wars. It never belonged to the British in the first place.
> As opposed to China, who will probably invade pretty much every Asian country, and the only big unknown is the order.
As opposed to the various US government who have overthrown countless foreign governments when those failed to align themselves with the US interests.
The US has destabilized the entire middle east and created an unprecedented wave of refuges coming from Libya and other neighboring countries and left Europe alone to deal with it.
The US has in the last 30 years invaded multiple countries under false pretenses, taken them over and when nothing worked and the writing was on the wall, left in a hurry again leaving someone else to clean up the mess left behind.
> The South China sea (including Philippines, Japanese, Taiwanese territory) is under Chinese control. And the countries' only hope for maintaining independence is the US.
The US is only helping to contain China in this part of the world because it is in its best interest to do so. The day this changes, the US will leave and these countries will have to fend for themselves once again.
This is certainly not done out of the goodness of the heart of the US. It's about protecting trades routes that are vital to US interest and that is about it.
> Accepting Chinese currency is like France buying Nazi bonds in 1939 (which France and most European countries did, btw). It seems like, in fact it is, the height of stupidity, but it's amazing what a little bit of promised money can make people do.
Since you are mentioning WW2, let's not forget that the US was happy to let much of Europe fall into the hands of the Germans and let Japan continue expanding it's empire until the point where Japan attacked Pearl Harbor. Who knows what would have happened if the US was never attacked?
My point is this one, China, just like the US likes to increase/maintain it's influence in the world. Both countries used/ will use any means necessary to achieve their goals whether its through warfare or diplomacy.
Is China better than the US, probably not, but let's not pretend one second that the US is not using a double standard when it comes to the world order. Rules for thee not for me and all that.
To be fair and very frank: the USA does the same things
Peaceful neighbor: greenland or mexico (sure the cartel related violence but it isn't per se state.)
Jack MA is the famous chinesse example, but it was close enough for bill gates, howard hughes and mark zuckerberg.
Totalitarian state: It depends, as someone born in the USA, I've felt much freeer in China then USA. USA states and cities have been pushing things such as teens/kids can't be alone - yes it isn't federal.
More recent, just look at the turning point usa assination - don't want to get to political since that's a black hole of political theater there but - that isn't common outside the USA.
Credit system: USA's credit system is much more abusive then china's social credit system.
While most of the issues are just present in the current administration, and should go away with the next administration - China has acted more responsibile and more consistent with it's policies while the USA is going all over the place lately.
But for terms of currency, both are not great as of now - the rmb pegged to dollar will change soon, usd reserve currency is eroding everywhere.
tl;dr buy gold I guess
https://www.politico.com/news/2024/08/28/trump-zuckerberg-el...
"Former President Donald Trump writes in a new book set to be published next week that Mark Zuckerberg plotted against him during the 2020 election and said the Meta chief executive would “spend the rest of his life in prison” if he did it again."
People would trust China for the same reason people still trust the US after it invaded 2 countries in the middle east for no reason whatsoever and decided to imprison 2 million of it's citizens at any given time.
If tomorrow there are better prospects of making money in China, then people will go to China and use the yuan to store their wealth. It's that simple. Morals have nothing to do in this equation.
I don't necessarily disagree, but can you explain why you think it is, that people keep trusting powerful states which keep giving plenty of reasons to not be trusted?
But we're talking about what you can trust a government to do here. It matters even if you're indifferent to morality or politics. It's very much relevant to making money, too.
You can see that clearly now with how the EU completely messed up their negotiations with Trump regarding the tariffs.
If you are an investor and you are given the chance to invest in two companies, one of them located in a country that is not afraid of throwing it's weight around to get things done or defend it's interests and the other who might have a better record in terms of human rights but doesn't want to appear too aggressive, which one do you pick?
If the only thing you care about is ROI then the answer is easy. Is it right? Probably not but that is just the world we live in and the system that we are all part of.
Obviously this is a simplified example but you get the gist.
Personally I think that the problem with the USD is that it can be used as a weapon against other countries. Why would China risk being cut off from the global banking system like Russia was? It simply makes no sense.
Cutting Russia from SWIFT was major mistake.
It only reinforced what China and other countries already knew, that is, that it can be weaponized in an instant. That in turns means that we should see a decrease in the USD dominance and a shift away from the traditional big players like SWIFT in favor of other home grown systems like CIPS.
The only way out is to actually start creating and exporting something else besides war, weapons or weapon backed 'IP', or 'credentials' (degrees).
The credibility of the credentials has gone down the toilet.
To get the world to actually buy real stuff from you, you have to produce goods they actually want.
Not sure the US is actually ready to re-uptake 'manufacturing' of products at a quality and price point the rest of the world sees as good value.
The benefits of leverage are dramatically maximized and reinforced by using them as little as possible, on the fewest targets as possible, for the shortest intervals possible, to obtain the most decisive results as possible.
Helping an ally interminably not lose on the battlefield (instead of supporting a win), is also a leverage destroying strategic error. There goes significant deterrence.
And to triple down, the US has expanded its sanctions (er, tariffs) to all its enemies (uh, trading partners), giving everyone strong signals that no relief is coming, other than to back away from the US.
Leverage that took a couple centuries to achieve is hemorrhaging.
And we are living in a Kurt Vonnegut novel.
Whether we water and fertilize the seeds, or let them dry and wither will decide the level of credibility we get in the future.
Strong institutions are absolutely critical for long term economic success. Enforcement of the rule of law, accurate data and credible monetary policy are the bedrock on which long term economic prosperity is built. Right now, we seem to be taking a jackhammer to that foundation.
Meanwhile PRC not entertaining being reserve because eating Triffin shit / be global lender of last resort retarded. What PRC does offer is selling entire tech stack to get 90% modern at 30% cost. At least PRC fine for short/medium term if investors run to US to watch line go up (at the expense of US debt -> domestic drama), while industry runs to PRC to for material goods that keep their country running. It's a degree first/second order leverage (indispensable tech/industry to supply indispensable tech) that builds reserve currencies, having goods no one else has, in PRC case, having goods at affordable prices no one else can match, and in many ways bypass downsides of Triffin, as long as PRC can convince enough countries to settle in RMB for transactions relevant to PRC interest.
But something really needs to replace the petro dollar, especially as chinese EV and clean energy tech production reduces or eliminates the need for having a petro dollar at all in most of the world.
All the talk about about trade or industrial might is pointless if the Yuan isn’t fully convertible and the exchange rate floats.
And China isn’t going to do that any time soon because of capital flight out of China and the artificially low Yuan pumps exports.
It might be tough for the US to accept the higher cost of global resources (and thus become a poorer country) but maybe this gradual decline in dollars status is what the administration hopes is the best case.
In many ways, the US is a spiral descent culture while the UK lost is all and ascended again but to lower levels.
At end of the day PRC doesn't want RMB as reserve - they don't want Triffin either. They just want insulation from USD weaponization while the U.S. is sanction-happy and forced into erratic policy trying to "solve" its structural bind by making foreigners eat the cost. The real Chinese play is to build RMB strength at home while the U.S. either burns the dollar to dig out of the debt hole, imposing losses on global investors, or keeps digging until debt service alone paralyzes U.S. policy capacity, already visible in constraints on defense procurement, i.e. airforce / naval capitalization. That paralysis is the bigger strategic win than simply ending USD reserve status.