Over the course of many blogs and News and Views from the NefariumsI have been urging that two countries to keep an eye on were Germany and China, not the least because of the close trading relationship between the two, and not least because of their respective geopolitical position. Similarly, I have urged that one keep a watchful eye on German-Russian developments, and on calls for replacements of the US dollar as a reserve currency by something else.
Well, according to some, the something else may be on the way:
Now while I have some doubts about the feasibility of the Chinese currency as a reserve currency, and massive doubts about allowing the reserve currency of the world pass to any Communist power, the very fact that anyone within the US-backed IMF would say such a thing also calls for a bit of comment.
First, this could be in itself a bit of fear-mongering, of the “you-think-it’s-bad-now-with-the-US-dollar-as-the-global-reserve-currency-and-US-military-adventurism-just-wait-till-the-yuan-is-the-reserve-currency” variety. So far, Beijing isn’t raining down drones on top of targets in the Middle East or Africa, and the people in those regions are smart enough to realize that Beijing would be even less tolerant of “terrorism” than would the USA. More to the point, Beiking’s soft imperialism is more effective than the USA’s-IMF’s hard imperialism.
Secondly, I rather suspect this is a bit of deliberate directed narrative meme-planting in another sense, i.e., that of preparing us for the “acceptable and inevitable dialectical alternative,” namely, a currency basket as a reserve currency, a varient on the Special Drawing Rights basket already in existence.
So…maybe it would be a good idea to watch for versions of this: a combination yuan-ruble-euro, or yuan-ruble-deutschmark(if the inevitable is allowed to happen in Europe). In short, keep watching China, Russia, and Germany folks.
See you on the flip side…