Could China Demand the US Dollar Lose Reserve Currency Status?

Phoenix Capital Research's picture

The biggest issue in the financial system… the issue that CNBC is completely avoiding… and 99% of professionals are ignoring is the US DOLLAR.

The US Dollar has ripped to 103.

This is a truly MASSIVE problem.

The Chinese Yuan is linked to the US Dollar. With the US Dollar at these levels China has rapidly entered a financial crisis.

In the last month, China has:

1)   Burned through over $70 billion defending the Yuan.

2)   Had to halt trading in its multi-TRILLION dollar bond market.

3)   Had to issue emergency lending to financial firms to keep them afloat.

ALL of these are linked to the US Dollar’s rise. And it’s lead the world to a very nasty situation.

China has a couple different options, NONE of them are pretty for the financial system.

The most obvious one would be a LARGE Yuan devaluation similar to the one that CRASHED stocks in August 2015 or January 2016.

Indeed, China is already doing this. But stocks continue to be in “la la land” driven by the media’s nonsensical obsession with Dow 20,000.

Alternatively China could go for the “nuclear” option and demand that the US be removed as reserve currency of the world.

This is not some crazed notion. China is the second largest economy in the world. And the Yuan is now part of the IMF’s SDR currency basket along with the Yen, British Pound and the Euro.

I’m not saying the US Dollar would necessarily LOSE reserve currency status, but if China were to publicly call for this, the consequences would be severe.

As in, CRISIS severe.

While 99% of investors ignore this ticking time bomb, smart investors are already preparing.

If you've yet to take action to prepare for this, we offer a FREE investment report called the Prepare and Profit From the Next Financial Crisis that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.

We made 1,000 copies available for FREE the general public.

To pick up yours, swing by….

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research





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pitz's picture

The purpose of 'reserves' is to stabilize cyclicality between trading partners.  If the US can't eventually export more than it consumes, then it is completely pointless for foreign nations, on the whole, to hold USD$ reserves. 

buttmint's picture

Obama is a real polished turd...unleashing provocative moves as he gets evicted.
Ever have a shithead tenant wreck a living unit because he/she is a petulant cunt?

Same same with USA

Madcow's picture

US FED, IMF, EU, EMU and the rest of the Hee Haw Gang seem to be certain of 3 things:

1. Western women will line up around the block demanding to be raped and decapitated in order to punish nationalists everywhere.

2. Governments of emerging econmies will continue to support the petro-dolllar until they reach their goal of suffering a Venezuela-style sudden stop collapse.

3. Bankers had their fingers crossed when they issued CDS and can simply declare "not paying" and force their inevitable catastrophic losses upon the US taxpayer. 

AR15AU's picture

4. That everyone everywhere maintains active membership in the Cult of Paper Promises and any element who's atomic number be 47 or 79 is to be hated by cult members and cast upon the rocks.

PoasterToaster's picture
PoasterToaster (not verified) Dec 29, 2016 3:08 PM

Bring the jobs back home.  Close the Chinese government.

Silver Savior's picture

Absolutely. The dollar should fall from its status as it's not gold backed.Its just another fiat currency on the chopping block. In fact totally get rid of it and I will celebrate!

johnjkiii's picture

If you're doing international trade, do you want to settle your transactions in Yuan and throught Chinese banks? If so, raise your hand.

Silver Savior's picture

I would much rather have the Yuan.

lakecity55's picture

Bath house: China has hacked the stawk market!