The dollar haters have been touting that the Chinese yuan, or otherwise known as the renminbi, would kill the dollar and gold will soar. I have warned that China will take the spotlight as the Financial Capital of the World once again but only after 2032. A real assessment of international capital flows reveals the truth. The Chinese renminbi accounts for only a share of 1.85% share of the international cash flows. In fact, the renminbi’s global share has declined from nearly 2.5% of total global capital flows in 2015, for that was its peak in September 2015 actually on target with the Economic Confidence Model. So despite all the fanfare, China has entered a decline since 2015 – not a rally to kill the dollar.
The Beijing government has opened foreign capital markets in recent years. Since 2016, China’s currency has officially been the fifth world currency of the International Monetary Fund alongside the dollar, euro, yen and British pound. That was supposed to kill the dollar. That had zero impact contrary to the dollar haters who concoct endless scenarios to paint the picture of the end of the dollar. One has to wonder why people continue to read these people. They have NEVER been right. They have used the scare-tactics that increasing the money supply would devastate the dollar and create hyperinflation. Another failed scenario. They there was the one about China was going to trade “real” gold, not paper futures as in New York COMEX. That one was supposed to kill the COMEX and everyone would rush to China. Well, that did not happen either. They lack any comprehension of how the world functions and were blind to the fact that by starting with gold trading in yuan, it was a tiny test market for the floating of the yuan itself.
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