I enjoyed reading every part of this excellently written article, although I find it very hard, perhaps due to my own ignorance, to agree that the Chinese Yuan will be a replacement for the USD even though I've got no doubt that the latter is growing feeble by the day. As you know, the gold standard was abandoned when president Nixon realised that it was no longer sustainable. If the Yuan ever becomes a reserve currency, I am afraid that history will repeat itself as it might also have to abandon the gold standard. I will like to know what your thoughts are in this regard. Cheers!
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From what I understand, the Chinese are NOT actually trying to have the yuan become the new global reserve currency. I believe they'll be satisfied if the US$ is dethroned, and then let the chips fall where they may.
China has plenty of gold, and it will back the yuan with gold. That might give the yuan the status of reserve currency, even tho it will not be as dominant as the US$ has been for the past half century.
And if the Chinese do establish a new gold standard, I believe they will do so in such a way that they will not have to abandon it. Nixon did not have to abandon the gold standard, but he did so anyway. At the time, China apparently commented on the foolishness of the move. I doubt that they'd make such an idiotic and foolish move themselves.
(I read that comment – China's criticism of Nixon's move – a few years ago, but now, I cannot find it. If I ever do find it, I'll definitely include it in one of these Do$ posts.)
Thanks for the enlightenment in your comment above. Now, I understand your arguments quite well and can say it makes sense to me. Pardon the troubles from this Coconut-headed fellow. Cheers boss!