Posted Apr 2, 2020 by Martin Armstrong
QUESTION: Hi Marty,
You were completely right, as always, about the USD rally. When we get closer to 2032 and thus closer to China being the number 1 economy of the world, will the CNY take over the position of the USD.
Apparently in Asia people are already accepting more and more CNY in favor of the USD. Can you please shed some light here, thank you for your answer
ANSWER: That is the way the cookie crumbles. However, we may see a completely new monetary system by then. The dollar being the reserve currency imposes a lot of problems. First, whatever economic policies take place in the USA, they are exported. Thus, a rising dollar right now exports deflation to those countries using a dollar peg. This is why the British pound lost its stature in 1949. The devaluation at that point impacted the entire Commonwealth and that is when we see many member break with the pound.
In 1949, use of the British Pound was terminated and the Canadian Dollar remained pegged to the USD at 1.1 CAD = 1 USD. In the 1950s, Canada decided to have a floating currency; however, in 1962 the currency became a fixed exchange rate again at 0.925 USD = 1 Canadian dollar.
We will most likely see some sort of a basket of currencies emerge rather the CNY replace the dollar as a reserve currency.
The West is committing economic suicide for it is desperate to cling to Marxist socialism for politicians know not how to run for office without promises to take money from someone else.