"History is a wonderful thing, if only it was true"

Saturday, May 16, 2009

Straw Man

Nouriel Roubini does a straw man argument
The sky is falling the sky is falling, the dollar is doomed

My question is why China puts their funds in the US Treasury market ... security, transparency, liquidity?

Op-Ed Contributor - The Almighty Renminbi? - NYTimes.com:

"But what could replace it? The British pound, the Japanese yen and the Swiss franc remain minor reserve currencies, as those countries are not major powers. Gold is still a barbaric relic whose value rises only when inflation is high. The euro is hobbled by concerns about the long-term viability of the European Monetary Union. That leaves the renminbi."

But then he goes on to say ...

"At the moment, though, the renminbi is far from ready to achieve reserve currency status. China would first have to ease restrictions on money entering and leaving the country, make its currency fully convertible for such transactions, continue its domestic financial reforms and make its bond markets more liquid. It would take a long time for the renminbi to become a reserve currency, but it could happen."

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