The change of economic paradigm in the world is in high gear. More and more countries come to the conclusion that they need to prepare their financial system for the coming global changes.
China attracts most of the attention to its efforts with its consistent policy of dollar replacement as a dominant means of payment.
In 1960s Japan had also a good economic growth, the so-called Japanese economic miracle. Japanese authorities were overoptimistic about yen’s future and really believed it to make a competition with the US dollar. However, the US authorities forced Japan to rise yen’s course. Since then Japan’s economy has flown into prolonged recession that continues even now.
China is approaching its recession quickly but trying to escape. Yuan has been included into the Special Drawing Rights basket. But it’s too early to celebrate as China clearly doesn’t know what it has to do with that.
The USA Direction
In their turn, the USA spot-kick certain countries at risk to destroy their economic and monetary systems. In the confrontation with China, the plan is to globally replace Chinese manufacturers and find an extra market for own goods/products. What we may observe now between China and the USA is the fight for those world markets. In the context of the article, it is clear that the USA will target to devaluate any national currency that stands in the way and hinders their plans. Yuan may perfectly follow yen’s path.
The story will resemble the one with Russian currency – ruble. Last year Russia was forced to devaluate ruble. It lead to investment capital outflow. Most of the investors put up money into the US economy (a good trap, admittedly).
However, financial sector share in financial system is excessive which will lead to structure crisis and a presumable collapse or financial revolution – whatever you prefer it to be called. The US will struggle up to the end, anyway, that may lead to the Third World War progression. The only way to structurally withstand the financial aggression for other countries is to create their own financial systems. But will they be able to do that in time?