Ready Or Not! New World Currency

[The Machine]

 

 

For the first time in 33 years, we're about to get a new reserve currency...

 

A NEW currency will likely get "reserve currency" status this October...joining the four other world reserve currencies, writes Steve Sjuggerud in his Daily Wealth email.

 

In a decade or two, this newly added currency will likely challenge the Euro for the No. 2 position among reserve currencies. And in the long run, it could potentially take over the US Dollar's role as the top reserve currency.

 

This October's announcement is a significant event.

 

So how do we know this event will likely take place in October? Because that's when the International Monetary Fund (IMF) will announce the results of its meeting about the world's reserve currency system.

 

Twice a decade, the IMF executive board meets to reassess the makeup of its basket of reserve currencies. The next five-year meeting is this June. And the results of that meeting will be announced in October.

 

We haven't seen a major change to the reserve currency system in more than 33 years. But this October, the world will likely learn about a new reserve currency.

 

You may have guessed that I'm talking about China's currency, the Renminbi.

 

China is the world's second-largest economy. It could be the world's largest economy within 15 years. The country certainly deserves a seat at the "grown-ups" table.

 

China has asked to be included as part of the IMF's "Special Drawing Rights" (SDR) reserve currency basket. In my opinion, this June, the IMF should grant China's currency entry as part of the SDR.

 

The entire world gets it. Germany and the UK, for example, have been downright enthusiastic about China joining the IMF's SDR currency basket. However, the US is being embarrassingly ornery about this situation.

 

The US has cited a number of technical reasons why the Renminbi shouldn't become part of the SDR. In March, US Treasury Secretary Jack Lew visited China, and then said China was "not ready" for reserve currency status.

 

The US can seriously stand in China's way. It has the majority of the IMF's votes. So it's possible that the US could block China's request to have its currency included as part of the IMF's SDR.

 

But looking at the longer term. It'll be hard for the US to hold off China, which should become the world's largest economy soon. (I'm not being unpatriotic, I'm just stating a fact.)

 

And China's currency is already unofficially a reserve currency in many places...At least 40 government central banks have invested in the Renminbi, and more are planning on doing so, according to British bank Standard Chartered. More than 10,000 financial institutions already do business in the Renminbi.

 

In short, it's happening, whether the US government wants it to or not.

 

So, some sort of deal will likely be worked out between China and the US to give China the currency status it wants. I expect that's the news we'll hear this October (despite what the US is saying today).

 

Surprisingly, most investors haven't bought the Renminbi yet.

 

[jg1]

Bump

[The Machine]

[RRogers14]

 

 

 

For the first time in 33 years, we're about to get a new reserve currency...

 

A NEW currency will likely get "reserve currency" status this October...joining the four other world reserve currencies, writes Steve Sjuggerud in his Daily Wealth email.

 

In a decade or two, this newly added currency will likely challenge the Euro for the No. 2 position among reserve currencies. And in the long run, it could potentially take over the US Dollar's role as the top reserve currency.

 

This October's announcement is a significant event.

 

So how do we know this event will likely take place in October? Because that's when the International Monetary Fund (IMF) will announce the results of its meeting about the world's reserve currency system.

 

Twice a decade, the IMF executive board meets to reassess the makeup of its basket of reserve currencies. The next five-year meeting is this June. And the results of that meeting will be announced in October.

 

We haven't seen a major change to the reserve currency system in more than 33 years. But this October, the world will likely learn about a new reserve currency.

 

You may have guessed that I'm talking about China's currency, the Renminbi.

 

China is the world's second-largest economy. It could be the world's largest economy within 15 years. The country certainly deserves a seat at the "grown-ups" table.

 

China has asked to be included as part of the IMF's "Special Drawing Rights" (SDR) reserve currency basket. In my opinion, this June, the IMF should grant China's currency entry as part of the SDR.

 

The entire world gets it. Germany and the UK, for example, have been downright enthusiastic about China joining the IMF's SDR currency basket. However, the US is being embarrassingly ornery about this situation.

 

The US has cited a number of technical reasons why the Renminbi shouldn't become part of the SDR. In March, US Treasury Secretary Jack Lew visited China, and then said China was "not ready" for reserve currency status.

 

The US can seriously stand in China's way. It has the majority of the IMF's votes. So it's possible that the US could block China's request to have its currency included as part of the IMF's SDR.

 

But looking at the longer term. It'll be hard for the US to hold off China, which should become the world's largest economy soon. (I'm not being unpatriotic, I'm just stating a fact.)

 

And China's currency is already unofficially a reserve currency in many places...At least 40 government central banks have invested in the Renminbi, and more are planning on doing so, according to British bank Standard Chartered. More than 10,000 financial institutions already do business in the Renminbi.

 

In short, it's happening, whether the US government wants it to or not.

 

So, some sort of deal will likely be worked out between China and the US to give China the currency status it wants. I expect that's the news we'll hear this October (despite what the US is saying today).

 

Surprisingly, most investors haven't bought the Renminbi yet.

 

I started getting it two years ago.Never put your eggs in one basket is what we're always told.