What will happen if the chinese

China and Chile See Here 9. That is a very important question.

What will happen if the chinese

It also makes up They are very liquid and widely accepted outside the boundaries of their native countries The US is unusually provincial about accepting foreign currencies. Why would the US be different from the others, just because the dollar was no longer the primary world reserve currency?

Don W November 14, at 7: Consider the desire to create jobs locally by having a chronic trade surplus with the US. Now, the central bank has a choice. They can try to trade those dollars for some other currency via foreign exchange trades in the hope that some other country has a need for dollars.

This might result in the dollar depreciating overall and make maintaining the chronic surplus that provides local jobs more difficult. Or, they can hold on to those dollars, but convert them to US treasury securities in order to earn some interest. Taking an MMT view the other country presuming it is sovereign in its currency that exchanged the dollars for local currency just created additional local currency.

If we think of treasury debt and dollars as essentially equivalent in this case, the foreign country is using the US willingness to create financial assets via deficits to create money in their country. Instead of the foreign government creating jobs via government spending and deficits it is creating jobs by maintaining a favorable exchange rate to maintain a trade surplus, then exchanging the US currency for newly created local currency.

Then, the foreign government can make noises about how fiscally irresponsible the US is while claiming they are fiscally virtuous, while giving away their real resources for the benefit of a foreign country.

Daniel November 13, at 8: A trade imbalance will change the relative values of the currencies which could increases prices for US imports. For most goods the increased price lowers demand or increases supply and the imbalance decreases.

November 13, at The reality is that depressing the value of the dollar means a standard of living hit for US citizens: Plus imported goodies become more expensive for those citizens to purchase. Hmm, I see a comment along those lines and so I should write a follow-up.

MMT says exports are a real cost, imports a real benefit. And I agree about the typo.

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Mark Robertson November 13, at I agree with you. Does Krugman mean inflation? Or does he mean the exchange rate for dollars? As for exchange rates, a weakened dollar would make imports more expensive.

What will happen if the chinese

Almost everything in Wal Mart, for example, would become more expensive. Maybe Krugman means that US exports would be cheaper, and thus, the sales of exports would become stronger.

Again and again, Krugman almost seems to admit the truth of MMT, but then he back-slides into the standard b. Krugman consistently calls for more austerity…just not right this minute. GRP November 14, at 7: However as commodity prices escalate in value, their savings, meant for future imports of commodities, are seeing a depreciation in value.

They are caught between a rock and a hard place. If the volume of this currency is not linked to any local economy and only the global trade and is backed by the currently accepted currencies for international trade as well as precious metals, it could gain world wide acceptance.

The way you describe the creation of this currency seems similar to the creation of the Euro.May 12,  · If we consider it possible that humanity or our descendants will survive for another billion years, then what could we reasonably expect to happen .

Now, the question is what will happen to US / Chinese and Global economy if they start selling these dollar assets.

Impact on Chinese economy of selling US Treasuries Appreciation in the Yuan and depreciation in the US dollar. Watch video · The apparent Chinese decision to allow for a drop in the yuan "will be very detrimental to the global economy," Chovanec predicted. "If everybody gets into the act, it's a risk they push the U.S.

“Chinese mortgages are generally held by Chinese financial institutions in the form of whole mortgages.” So if prices were to drop, Chinese banks would suffer while U.S.

What will happen if the chinese

one’s most likely. If they wouldn't have invented a compass, travel will be more difficult because you wouldn't know which way you are going. Call them China’s gentrification refugees — people who were the backbone of the country’s economic boom are now victims of prosperity and changing priorities by China’s leaders.

Tobacco Farmer Newsletter: What will happen to our Chinese market?