Currency Traders - reserve currency, dollar, Renminbi

July 7th, 2009 by admin

SDR’s Were Just a Smokescreen

Did you hear about China and Hong Kong agreeing to settle cross-border trades in renminbi?

I know, you’re scratching your head and saying, but Chuck, isn’t Hong Kong a part of China? I could swear I saw the U.K. hand it over to China years ago! Ahhh grasshopper, you are correct…

But, Hong Kong retains their own currency, the Hong Kong dollar, or “honkers” as currency traders call them. And renminbi has never been allowed outside of the mainland China. But now Hong Kong Banks will be able to borrow or buy renminbi!

I know this all sounds like small potatoes. But, these are China’s baby steps to a greater goal: To gain wider acceptance for their currency. It’s how they will be able to spring the coup someday to replace the dollar as the reserve currency.

I truly believe their call to use SDR’s is just a smokescreen. These currency agreements that China has signed with Argentina, and the Southeast Asias countries, and have on the table with Brazil, is the real thing to watch. I see the SDR’s as a sort of stalking horse for China’s wish for wider acceptance for the renminbi.

 

By Chuck Butler - http://www.worldcurrencywatch.com

 

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Posted in Currency Markets, Currency Today, Currency Values, Global Currency
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