“Such a power [of issuing paper currency], in whomsoever vested, is an intolerable evil. All variations in the value of the circulating medium are mischievous: they disturb existing contracts and expectations, and the liability to such changes renders every pecuniary engagement of long date entirely precarious…Not to add, that issuers may have, and in the case of a government paper, always have, a direct interest in lowering the value of the currency, because it is the medium in which their own debts are computed.”
__John Stuart Mill
Commentary & Analysis
The Fabulous Shrinking Renminbi…
Over the last several years, many writers and assorted cranks, those with little understanding of the global financial system in its current form, have warned “soon [whatever nebulous time-frame that may be] the Chinese currency will replace the US dollar.” Back in early 2000’s we considered such a warning as either total hogwash, or at the least a bit of hyperbole. In fact, back in late 2010 we penned a report for our subscribers titled: “The Chinese yuan will soon replace the US dollar as world reserve currency: Not in this lifetime!” More on that shortly.
I would like to first summarize a recent article in the International Economy magazine, Summer 2017 edition, titled: “Bye, Bye Renminbi,” written by Benn Steil and Emma Smith. It is enlightening for those still concerned the Chinese currency will “soon” replace the US dollar as the world reserve currency...READ MORE