Quote
Kobo-Daishi
[
asiatimes.com]
link to a February 6, 2021 Asia Times article titled " Digital yuan could bust the United States ".
Unfortunately, the article is a premium article so you need to be a subscriber to get the full article.
But, I see the full article is posted to the Frontier Post web site.
[
thefrontierpost.com]
Don't know if this is the complete article since I've no way to compare it. It mentions a chart, but, there's no chart to it at Frontier Post, though.
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from the article
Historians still quibble about what event marked the end of the Roman Empire. Some future historians might choose Jan. 16, 2021 as the fatal moment for the American Empire. That’s when the People’s Bank of China and SWIFT, the global system for international monetary transfers, set up a joint venture to promote the use of China’s digital currency in cross-border payments.
It’s early days, but the joint venture could denote the end of the dollar’s role as the dominant medium of international exchange, and, more importantly, the end of more than $20 trillion of cheap lo.ans to the United States from the rest of the world. The US is able to run budget deficits now approaching a fifth of its gross domestic product (GDP), a level usually associated with Third World countries on the brink of hyperinflation, because the rest of the world holds foreign exchange reserves and transactions balances equal to a full year of America’s GDP.
China already is the world’s biggest exporter, and will become the world’s largest economy in dollar terms before the end of this decade. When – and the issue is when rather than if – China’s currency assumes a world status commensurate with its economic standing, the dollar’s reserve role will fade like the pound sterling before it, and the United States will have to learn to spend within its means. That implies a wrenching adjustment for a US economy dependent on vast amounts of foreign credit.
Economists call this “seigneuriage,” after the premium that a monarch earned by coining precious metal into currency. The value of seineuriage has exploded during the past decade. Now it may implode.
Blandly titled “the Financial Gateway Information Service,” the new company is the first official alliance of the Society for Worldwide International Financial Telecommunication and China’s central bank. China’s RMB accounts for just 2% of transactions in the SWIFT system today, and China’s financial system is far from ready to take on a reserve role. All of that could change, and swiftly, to coin a phrase.
For the time being the goals of the new Financial Gateway are modest; it has just 10 million euros in capital, 55% contributed by SWIFT and 34% by the China National Clearing Center (CNCC), an entity created by the People’s Bank of China as an alternative to SWIFT after the Trump Administration reportedly considered shutting Chinese institutions out of the SWIFT system. Cross-Border Interbank Payments and Settlement Ltd, the CNCC’s foreign exchange arm, owns 5%, and the People’s Bank of China’s Digital Currency Research Institute owns 3%.
Digital currencies promise to drastically reduce transaction costs for international trade financing while improving transaction security.
