I'll try to publish here a new entry every Monday evening. I don't believe, that one can (I can) publish every day an interesting and elaborated entry/article. I hope, less quantity is transformed into quality.

Next enter will be November 23.

October 5, 2009

Renminbi

Ren-Min-Bi (RMB), the peoples coin (the coin of the people?) became the hero of the last news from the financial industry. First Blomberg wrote about the future of the RMB, as a reserve currency to replace U.S. dollar. Then the blogosphere caught up. At the end even press on the Periphery, for example in Poland, were writing about it.

In all these voices one can outline the same repeated advantages and limitations of RMB as a reserve currency (and generally, as the currency).

I do not want to repeat here someone's else opinions. The above links told everything about real opportunities of RMB to become a global currency. Blomberg even pull out in this case the pensioner Kissinger. Although in the retrospect, his predicts from the years of the Cold War hardly proved correct, so why would anyone trust him now?
How really looks the potential of China? I found an interesting chart.

The first thing drown attention is the vast disparity between the share in the world economy of India and China today and in the past. The combined U.S., Western Europe and Japan economies remain de facto at the same level since the mid-nineteenth century (changing only the shares of individual regions).

If we add up the economic potential of India and China (17%), and we find that together they have about 40% of the population of the Earth, their participation in the global economy, even at 40% would not be unusual. It is also interesting to compare similar disparities between the population, and economic potential of the combined U.S. and Western Europe, but everyone can do it by him or her self.

Trends of civilization can be seen in the perspective of centuries, not years or even decades.

Since several years, I believe that the West, especially Europe is currently re-inventing it-selves (this was done several times already in history). Perhaps this process will not be completed in our lifetime, but one day shall come, and it is interesting to watch it live.

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