The byline says it's from Bloomberg (a financial news service).
There doesn't seem to be anything political in it to me, it's just bland news.

Some of this sentiment was stirred up last month by none other than the US when we shut down our governement and threatened to default on governement debt. The Chinese are heavily invested in our debt and their leaders became very concerned to the point of sending a written message to our government officals urging them to stand by the our debt made to date.

The other matter about the yuan becoming more important on the world scene is simply demographics.
As the Chinese government little by little opens their borders to international business, the yuan get more play. Its simply because there are more people using the yuan than any other currency because there are more Chinese than any other ethnic group in the world.

There'll be great disruption in the U.S. when the U.S. Dollar is no longer regarded as the world's reserve currency.

The recent default helped to hasten that day, I figure.

ole joyful

I get easily puzzled when people make comments using vague generalities and innuendo. The more general and broad a comment is, the more it makes me think that the commentor may be covering ground they don't fully understand themself.

Please say more about what great disruption you're predicting to happen. And also please explain why you think this year's version of political nonsense concerning the budget (which, by the way, has happened in most of the last 20 years and also happens frequently in many states) is so significant.

I don't always agree with you, Snidely, but you pretty well covered it here.

I defy anyone to find a stock market making the masses richer than the US markets over the last 20 years. Anyone can say the near default caused us to slip in the world, I would agree with that to an extent but the truth is absolutley NO other country has the financial power over this planet, that our country does. I really think that slip has much more to do with other countries realizing their utter dependence on us and not being happy about that. I'd say that is a good thing that other countries go it alone, we can not help everyone when we have people needing help in this country and we can better our country thru spending more on ourselves.

When you look at what passes for upper middle class here and what the rest of the world has it is NO contest. Just look at how there has been an all out explosion of masses driving what USED to be considered luxury cars... Luxury car used to be $50,000 now everyone & their brother has one and getting a $75,000 car is not unusual. The mere number of stores that used to be high end (Coach, Tiffany, Nordstroms) that are now common place is staggering. No other country has the saturation of market to afford that.

China and India may have more masses but they are not buying a new Coach purse 4 times a year, driving an Infinity and living in a $400k house like a good % of people in the US are. Now in 10 or 20 years they may get to that point but alot can happen between now and then... I vividly remember TV ads for cars at $7k when I was young, look how far things have come now. ~ liz

marilyn, thanks for keeping an open mind.

I like to talk to people I expect to not agree with - I'm more likely to learn something from them than from people whose views are similar to mine.

The U.S. used to be a large manufacturing nation, and a large creditor nation, but in recent years, as a substantial portion of the manufacturing has been moved offshore, and with larger expenses, coupled with a certain distaste for raising taxes, they've issued a lot of bonds, many of which were bought by the Chinese, partly to facilitate our desire in the western world to buy a lot of their stuff.

The U.S. has been going much deeper into debt, each month, in recent times.

Not only that ... they've been printing large quantities of new money ... that they've called "quantitative easing".

The Chinese and other foreigners have become reluctant to buy more U.S. bonds, fearing that their debt would be paid in cheap dollars.

Among other things, they've used some of those bonds to pay for the purchase of Canadian oil companies, and mining and other resource suppliers in different areas, including Africa.

When twice as many Dollars are floating around, with minimal increase in goods available, it isn't long before what used to cost $1.00 will cost $2.00.

Sooner or later, the piper will have to be paid ... and there'll be difficult economic times for a while when that is being accomplished.

One can only rack up bills on the credit cards for a limited period.

People can go bankrupt: nations can't.

But if one's currency was earlier accepted readily in almost all of the countries of the world to carry on trading, governments and people in many areas will become increasingly disenchanted with using that currency.

In earlier times, when the Chinese wanted to buy Saudi oil, they bought U.S. Dollars to underwrite the trade, with the U.S. moneyed people making a commission.

In recent times, they've been carrying on that trade directly, with out using U.S. Dollars. Other major participants in world trading have begun following that route, as well.

ole joyful

I'm sure you're a nice guy as well as being joyful. I disagree with many of your cause and effect comments. I'll just toss you a few of my thoughts ...

Most industrialized countries have seen manufacturing jobs "go abroad" to lower cost locals. The US is one of dozens to experience that.

The Chinese have earned billions of dollars from their favorable trade results in the last 15 years. The US dollar remains the world's largest reserve currency and a good chunk of Chinese earned dollars remain unconverted and are invested as such. That's their choice and strategy. If the dollar falls, that affects countries outside the US more than the US (other than in our ability to sell more debt).

More trade will happen in Euros, that's ineveitable and not to be feared. The Euro has been weaker than the dollar in recent years and thus an inferior store of value.

Another aspect of this problem is that the Chinese (against international complaints) continue to manipulate the exchange rate of their currency, keeping it artificially low.

The Chinese buy energy resources outside of the US because numerous efforts to buy US energy assets have been blocked on national security grounds. Most recently, a proposed purchase of a small wind farm in Oregon was stopped.

The US national debt level isn't important, it will never be repaid. There's no piper to pay. The willingness of buyers to buy is important, because that affects the interest rate and so the cost of borrowing that's in the budget that's unbalanced anyway.

My view is that the realities of what you've described are much more complicated and mostly unrelated to your explanations.

And you still haven't described the great disruption you alluded to. But that's ok, you're welcome to disagree with me all the same.

U.S. folks have had their money accepted as payment almost everywhere in the world, for two or three generations.

They've scarcely ever had the experience of having their dollar refused, as being something of a suspect currency ... will it hold its value?

That is happening in some areas, and some semi-official financial agencies in some countries are putting limits on the amounts of U.S. funds that they are willing to accept/hold (I'm not sure which, and failing memory leaves me unable to provide specifics, but I read it recently).

When I was young, we had radios, TVs, etc. made by GE, Westinghouse, Emerson, Electrohome, Admiral, etc. and the electronic goods production has been taken over by offshore sources.

Much of the research is being done, there, as well, and as more patents are held by people/institutions in various areas, there'll be reduced income for us from royalties, etc. when others use them.

In worldwide competitions of scholars, many of the kids from the second or third world, despite many of their school systems being badly undernourished, are producing better results than the young folks in our area. One wonders whether some of that may be due to motivation - as they have grown up in an area where one must excel in order to get ahead, while our young people have grown up expecting that things will be well for them.

We've been rather used to being top dog for a few generations, but the playing field is being levelled, as other parts of the world become more prosperous.

Having lived among refugees, I can't feel badly about people who were desperately poor having work ... but at the same time I feel unhappy about many of the formerly high-level workers in our part of the world becoming unemployed.

We've just heard that one of H J Heinz plants, in our area, that's been around for something like 100 years, is to close next year, with something like 700 people affected directly, along with hundreds or thousands of farmers who produced tomatoes and other vegetables for them.

Over thirty years ago, at the time of the first oil price crisis, when I was working in a plant building travel trailers and truck campers, there was some discussion of the need for us all to be concerned for the efficiency of our operation, and some of the guys said that wasn't our problem - that was management's problem. I said that if quite a few people decided that the extra cost for gas to feed their truck with camper, or a big enough engine in the car, needing fuel all year, to pull a seldom-used trailer, led a number of people to decide not to buy our product, that some of the manufacturers would go out of business, and it was in out interest to keep ours efficient enough that it wouldn't be us. Couldn't get folks interested: not their problem.

I was concerned also about a number of our companies being bought by companies in other countries, and many said that they didn't care who owned the factory, as long as they had a job. After one of the world's biggest nickel companies, formerly based here, was bought by an offshore company ... the local workers, who'd hated their management for years as being skinflint, etc. ... decided, as they dealt with the new owners, that the earlier ones hadn't been so bad, after all.

ole joyful

"U.S. folks have had their money accepted as payment almost everywhere in the world, for two or three generations. They've scarcely ever had the experience of having their dollar refused....."

No person or business today has that experience with exchanging US dollars for a foreign currency, this is an absurd comment. No response is needed.

You say "We" a lot, but I believe you're Canadian. What "we" are you referring to?

Of the Heinz plant closure you mention, I found a story saying that a plant in Canada is being closed and the result will be increased hiring at US plants where production is being consolidated. While I sympathize anytime I hear of someone losing a job, whether this news is good or bad news depends on which side of the border you care more about. To me it sounds like good news, offshore production is returning to the US.

We can bring this to an end. As before, I'm sure you're a nice person but you should restrict your efforts at insightful comments to topics you know something about. Macro economics and international trade can be left off that list.

The U.S. used to be a major manufacturing nation. It was also a major creditor nation.

Much manufacturing has gone offshore.

There's been a major recession recently.

The U.S. went deep into debt to rescue some major companies, especially banks, which were, " ... too big to fail".

Since then, the U.S. government has been increasing its debt by large amounts, monthly.

They're printing money, in large quantity. Enough so that when some of their bondholders expect to cash their bonds, they fear that they'll be paid in devalued currency.

ole joyful