Tag: Yuan dynasty

Why China’s Yuan, not the Euro, could become the dominant global currency
Unemployment

Why China’s Yuan, not the Euro, could become the dominant global currency

David talked about why the Euro hasn’t challenged the Dollar as an international currency, despite being used by more people than the American currency.
So surely that should mean that the Euro becomes a dominant currency, right?
After all, both trading blocks are made up of very big spenders indeed.
What we have seen is the Euro when it was launched, was launched as a currency that represented a very disparate range of countries with very different fortunes.
That meant because you had to have one interest rate to represent all those countries what you saw was their economies doing wildly different things.
You had an interest rate that was set to suit the economies largely of the largest countries like Germany and France.
In fact, many central bankers when the Euro was launched around the turn of the millennium did express openly their concerns that this could threaten the Dollar’s position.
Will the Euro last?
It has lasted so far and it has been through a pretty major test over the last decade.
If you look at the what happened with the financial crisis If you look at the what happened with Greece, in particular, and the way Germany and the richer neighbours had to turn around and say “Well, what are we going to do about this crisis?”