The China Bubble's Coming -- But Not the One You Think

Re:The China Bubble's Coming -- But Not the One You Think by rfreytag on Thursday July 30, 2009 @11:50AM (#732452)

Here is an outside the bamboo box idea - PRC (China) adopts the dollar for its external currency while keeping the yuan. This allows them to appear to support the dollar while retaining control over the flow of (yuan) currency in and, crucially, out of the country. They might be able to sell T-bills in this environment.

Won't happen of course as it would be perceived as a loss of sovereign power but remains an interesting speculation.

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Re:The China Bubble's Coming -- But Not the One You Think by joe_the_user on Thursday July 30, 2009 @04:12PM (#732969)

Sorry but this is not a new idea but close what China did for twenty years. For most of the PRC's history, Chinese currency was usable only in China with exchange rates closely controlled. Even today the currency is not fully convertible. Starting in the nineties, this situation worked well for them until things got so unbalanced that we have ... well, the situation that we have today.

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Re:The China Bubble's Coming -- But Not the One You Think by rfreytag on Thursday July 30, 2009 @11:14PM (#733666)

I believe you missed my point which was that people do not speculate that the Renminbi might be replaced by the US dollar. And that this might happen because it would retain the currency controls presently afforded by the yuan being distinct from the external currency (RMB).

That -is- new, but unlikely for the reason I gave.

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