> why not gold? surely, you can see that china is continuously buying more and more gold reserves.
I’m not operationally involved with gold markets so take this with a grain of salt, but I wonder if there is enough gold being traded for the market to supply the better part of $1 trillion to a central bank hoard. Markets are adaptable things so I’m not saying it’s impossible, but it sure could get extremely interesting. Enough so that I might have to learn a bit about it and see if I can’t nibble some crumbs that fall off the table.
> At some point, china would also be able to convince the global south to start trading in the chinese yuan.
Agreed. But are the Chinese willing to start running the gargantuan RMB denominated current account deficit that would be required to supply adequate RMB for foreign currency users? Probably not. Instead they will probably try to get foreigners to fund purchases of Chinese exports with Chinese originated RMB denominated debt. It’s going to make the World Bank and IMF look like Santa Claus. I foresee African countries being strip mined for resources just to pay the interest. And, in the end, I don’t see the Indians or other regional economies faring much better.
It really is a shame the US powers that be are running the dollar system into the ground, because while it’s certainly quite imperfect and even exploitative, it’s positively benign to have foreign reserves provided by the issuer’s debt rather than the receiver’s debt.
