Saturday 22 October 2011

The Renminbi VS The US Dollar

It's the season of crisis and some more crisis; socio-political-economical; the world is witnessing its share of miracles and news that just make things astonishingly worse or may be good for some.
And when it comes to miracles; how can we forget the nation that taught the world its art of duplicating miracles !
The Red Republic - CHINA - most populous yet the most robust economy of today's world.
The Monarch State's economic growth - when the entire west is under the sulky clouds of debt crises and recession fears; the Dragon continues to roar and just doesn't seem to stop.
And why not;  Chinese products have become the part & parcel of everyone's lives today. 1.3trillion USD Forex reserve - the largest holder of the world's reserve currency; China has it's reasons to outshine every other economy.

And today with the US state of economic affairs in jeopardy, the world's trust on it's reserve currency the USD is slowly declining.
"WHY TRADE WITH THE OTHER COUNTRIES IN A CURRENCY THAT BELONGS TO A THIRD COUNTRY." - that's what the "little eyed dragons" have started thinking !
USD rate high or USD rate low ( wrt to the aborigine currency); the positive & negative impacts on exports & imports are quite obvious.
Let's take the example of trade between India & China:
Today when China has to export or import goods from India ( or vice versa); both countries have to deal in USD; and the market price of the USD ( compared to their native currency) is the deciding factor of the amounts of profits & losses.
So what's the standing of the RENMINBI compared to the USD today.
  • The world is losing faith in the USD.
  • Chinese economy is the most robust economy of today = RENMINBI can be trusted when it comes to international trade.
  • The Chinese are anyways manipulating the exchange rates of the RENMINBI compared to the USD by printing & bringing more currency notes in the market.
  • An appreciating RENMINBI compared to the USD will ensure China's stronghold on the world economic platform.
  • With RENMINBI replacing USD; the right side nations of the Atlantic ocean will become the leaders of the modern economy.
  • Chinese trade with the rest of the world in RENMINBI will make it's already robust economy even more rigid.
  • With CHINA leading from the front - it's say in the world economic matters can never be neglected.
The bottom-line of the above write-up is :

USD's reign is slowly diminishing; the dragon's fire product - the RENMINBI in the coming years might very well replace Uncle Sam's green "enviable" piece of paper !


NOTE : All ideas expressed are my personal views. 
For suggestions & queries - contact me : nakul.r90@gmail.com

Monday 10 October 2011

THE EMERGING INDIAN MARKET - a photographic glimpse

THE INDIAN MARKET

Wednesday 5 October 2011

$ The Ailing US Dollar $

The season of economic crises is writing an epitaph for some of the most trusted entities in the world markets. US Dollar - one of the most resilient and the reserve currency of the world seems to be in grave danger. I will present my personal colloquial views on the same very soon. But for the time being, I couldn't help but share this self explanatory article from the 'Wall Street Journal'.


Why the Dollar's Reign Is Near an End


The article explains why the world chose the USD as its reserve currency and gives some of the possible reasons as to why the next decade will see the birth of a new reserve currency.


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