Why Yuan Isn't Ready for Prime Time

There has been a lot of speculation concerning the goal and strategy of China concerning the place of the yuan or renminbi on the world economic stage.

I have no doubt the Chinese have a goal of becoming the leading reserve currency in the world, but if that ends up being a reality, it's going to be many years from now.

The idea that China is attempting to bypass the existing currency market and working to build an alternative to it is actually the exact opposite of what it really wants to do, which is to become a larger player in the current global economy.

For now, the yuan isn't close to being ready to be a currency leader, as China needs to take a number of steps before it's going to be considered a means of paying for major transactions on a global basis.

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United Nations Wants US Dollar Replaced, Control all Currency through IMF SDR's

A United Nations report today called for the removal of the U.S. dollar as the global reserve currency, to be replaced by special drawing rights (SDRs) from the International Monetary Fund.

It called for “abandoning the U.S. dollar as the main global reserve currency, saying it has been unable to safeguard value.

“A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency,” the report added.

The conclusion of the United Nations was the new currency system shouldn't be based upon a basket of currencies, but SDR's which would be controlled by the IMF.