Will King Dollar be dethroned? (Part VI)
On September 25, 2015, Chinese President Xi Jinping will make his first visit to USA. This visit is very significant for the following reasons:
•Today, US owes China US$1.3 trillion. Percentage wise, this is more than 20 percent of the total debt of US which totals more than $18 trillion;
•Today, the world supremacy of the US dollar is being threatened by China;
•For about 48 years now, US Dollar has already dominated reserve currency. No wonder, the US dollar has been the most widely accepted and widely used currency in the world. In about eighty-six percent of global currency transactions, the US dollar is used. Now China is threatening to dislodge US as the global dominant reserve currency;
•If and when the Chinese Yuan is voted upon by the International Monetary Fund (IMF) Executive Board to be one of the world’s reserve currencies, there will be a massive shift in the world currency markets. Billions of dollars will begin shuffling around the globe. Why is this so? Because countries will change the composition/mix of the reserve currencies that they hold as foreign reserves;
•To date, there is apprehension of some financial groups that there might be another financial crisis in US to be triggered by a stock market crash similar to the two one-day stock market crash in US history that occurred on September 17, 2001 when the DOW plunged 684 points and the other stock market crash which occurred on September 29, 2001 when the Dow average plummeted 777 points;
•While US imports of oil are dwindling because of its oil boom, China is now the biggest importer of oil;
•On August 11, 2015, China unexpectedly made a surprise decision to devalue its currency, the yuan. For three straight days, China allowed yuan to fall in value against the US dollar. China’s decision to devalue represented the largest for the past twenty years. Meaning that this is China’s biggest currency intervention since 1994.
Many are speculating that there will be events that will happen during the last two weeks of September 2015 and during the month of October 2015 that will trigger changes in the composition of the global reserve currency.
Have a joyful day! (For comments/reactions please send to Ms. Villafuerte’s email: villafuerte_nelly@yahoo.com).