Did ASEAN agree to use China's Yuan in place of US Dollar?

[upi402]

I heard on an Asian news program, NHK if I recall, that ASEAN agreed to use the Yuan and move away from the USD.
They have their free trade zone in the region already, as I understand.

But all I could find online was this sort of article;
http://sg.finance.yahoo.com/news/China-hopes-wider-yuan-use-afpsg-2207284778.html?x=0

[westerebus]

1. An ASEAN EU?

With the Yuan as the Euro?

Wonder who's going to be the central banker?

Have they got permission from Gullem Sacks?

Or did they just let the cat out of the bag?

Revaluation of the USD or strategic default if the Western Bond market goes under?

Or is their economic model coming unglued and they need cover?

The gold bugs will be drooling over this one.

Has their Sovereign Wealth Fund hooked into a JP Morgan play?

[amandabeech]

2. The Chinese will not let their currency float. Consequently, the U.S. dollar cannot be revalued

unless we slap a tariff on Chinese products and probably against products of countries that tie themselves to the Yuan.

In addition, most of the ASEAN countries manipulate their currencies nearly as badly as China, and we should probably slap tarrifs on goods coming from the entire area, including S. Korea for which Obama is pushing a "free trade" agreement.

P.S. India also refuses to let their currency float. If it did, all those tech workers wouldn't be so cheap.

We're being seriously hurt, and it is time to dump "free trade" as a religion and get real.

[Seminol3]

3. I hope

you're not under the impression that the U.S. doesn't manipulate the value of the dollar as well. It's in every nation's interest to follow a 'beggar-thy-neighbor' policy in a world of fiat money.

[westerebus]

5. Hi. Welcome to DU.

[amandabeech]

7. Not as much as the Chinese by any stretch of the imagination.

It was just a couple of years ago when it took 1.57 to buy a Euro. Now it's at something like 1.25. That's a big swing in the wrong direction, really. We have only lost markets by the swing, but it is caused less by the Fed's actions than by the fact that our currency isn't torn down by the PIIGS.

As I'm sure you know, China's economy has grown in the past couple of years, but ours is rotting fast at its core. The Chinese government, which sets a very, very tight trading range for its Yuan, has barely let the Yuan rise. Many experts think that the Yuan is undervalued by 20% to 40%. If the Yuan should become the trading currency, then add another 15 percentage points because a trading currency almost always commands a premium price, just like the dollar does now.

Welcome to D.U., by the way.

[westerebus]

4. They said they wouldn't un-peg to the $ either.

We know how that worked out once the euro headed south. I think they finally figured out that if they can't beat us, they just might as well join us. Us being western capitalism. Poor choice on their part, our crooks are much better than their's by light years.

We can re-value the USD all by ourselves. As a matter of fact the FED has been at it from day one. If they keep at Quantitative Easing and don't get a plan in place to curb the debt, the bond market just might take matters into their own greedy grubby hands.

Which in turn would make China more willing to get some sort of a a deal done in their neighborhood.

China has made some progress with the IMF and the World Bank. The SDR is very much a topic they want to push. The buy in to that poker game is in gold chips, not dollars. They are looking for a mechanism to unload USDs without pain. That includes trying to keep control of their own economy. Which as you know is based on selling us more stuff.

We may be coming up on one of those events that requires the good will and calm consideration of the the inhabitants of the planet, minus the governments of said planet, to resolve the question once and for all. What are we going to be when we grow up?

[Seminol3]

6. not sure I follow

"We can re-value the USD all by ourselves. As a matter of fact the FED has been at it from day one."

You mean the Federal Reserve? It has been devaluing the dollar since its inception.

"If they keep at Quantitative Easing and don't get a plan in place to curb the debt, the bond market just might take matters into their own greedy grubby hands."

The Federal Reserve isn't responsible for the debt, and can't 'plan' on curbing it. Our politicians are responsible for that, specifically the Congress that passes are budgets and sets our entitlement programs by law.

QE is a method to work at odds to the 'bond vigilantes'. Bernanke has threatened to print money and buy any asset, beyond the conventional purchase of treasuries to manipulate interest rates. He can print money to buy every bond issued in the U.S., government, corporate, MBS, etc. None of that 're-values' the dollar, it only diminishes it.

I think the Chinese authorities take his threats seriously, given the trillions he's expanded the Fed's balance sheet by since 2008.

"China has made some progress with the IMF and the World Bank. The SDR is very much a topic they want to push. The buy in to that poker game is in gold chips, not dollars."

SDR's are based on a basket of currencies, not gold. When originally created they equaled a specific weight in gold, but after Nixon took us off the gold standard the SDR was redefined. China's interest in them stems from their desire to reduce their (enormous) reserve exposure to devaluation from Bernanke's printing press and the U.S. government's trillion dollar deficits.

[westerebus]

8. From the top.

Had the FED under Greenspan not kept the interest rate as low as they did for as long as they did, the cost to borrow and incur debt would have risen in tandem creating tighter credit(higher interest rates)instead of blowing up the real estate banking bubble. That's just my opinion.

Had the FED applied due diligence as the supervisor of banks and opposed the repeal of Glass Stegall, instead of acting as agent for the banking industry in helping to create a shadow banking industry with the aid of Congress and the Whitehouse, their role as keeper of the economic engine is suspect. Again my opinion.

Given some variation of the current economic policy team has been in control of the oversight and operations at the FED and the Whitehouse and the Congress for decades, policy which becomes law is expressed in the functioning of economy. A tie as to the who did what as I view it.

Lower tax rates and higher spending accompanied with a FED policy of low interest rates allows the expansion of debt into the future. Lack of supervision of the banking industry allows for higher risk taking. Combining the policy and the practice creates what we currently have now. So can the FED influence the plan going forward, I think so. Could they propose a plan to the Congress?

Yes, Congress makes laws and passes budgets. Influenced by who? To who's benefit? The Whitehouse has the power to veto any law. Shared responsibility at governing. What a novel concept. pardon the sarcasm.

And to advise the Congers on matters of the budget. Tax and spend or borrow and spend. All the policy and platform stuff that gets them elected. Where does all this law making leave the FED?

On who's behalf are they working? If for example they keep interest rates at zero how does this effect the cost of borrowing by the US Government? Can they keep kicking the can down the road? Should the government force the banks and investors to take the haircut now?

If by purchasing every financial instrument of the US Government will this re-value the dollar? My choice of words. Printing presses or computer inputs with the full faith of the American people as interpreted by the FED. Dollar policy domestically or internationally?

As the reserve currency is it better to have a strong dollar or a weak dollar? And all those including China that trade in dollars would want what? When there is risk where do they go currency wise?

As to SDR's, the IMF charts the weight of many national currency's to the SDR. Thank you for the clarification. So why do they hold gold as do other central banks? Why are gold swaps so important if they don't change the price of currency? In a fiat world when a few key strokes will do, why bother with gold at all? Why audit the FED? I'm interested in why they are so interested in that not happening.

My thought is that China can trade their dollar reserves for gold. How do they get to lower their exposure to the dollar debt they hold without crashing the dollar? At the same time pushing to remove the dollar as the reserve currency? With out encumbering their economic policy and killing the goose (US) that laid the golden egg?

Which maybe why they want to put a large enough deposit down (gold) to buy out of the dollar game at the teller window of the IMF. The other player's at the table would have to agree and see it as in their interest also.

In this case, the Fed is as conflicted with the employment/ economic growth mandate as with domestic dollar policy in a globalized world. And China is voting in their domestic interest as are we.

At least I hope so. Does this add any clarity to my thinking process? Probably not. lol