Dear Comrade Xi(www.campbellramble.ai)
19 pointsby surprisetalk6 hours ago3 comments
  • andsoitis6 hours ago
    > What would China actually need to do to make the RMB a global reserve currency?

    My understanding is that in the long-run, you cannot be the world’s reserve currency AND hold a trade surplus. It is called the Triffin Dilemma.

  • andrewflnr6 hours ago
    Maybe it's a minor point among everything else, but I don't see why it's necessary that foreign investors in particular be able to short Chinese banks. It seems like if Chinese investors were allowed to short them then you would still get price discovery and at least any politically-sensitive "profits from bank failure" would stay in the country.
    • dmurray5 hours ago
      And while it might sound like government intervention incompatible with a market economy, short selling of banks has been prohibited in Spain, Italy and the US at various times in the last 20 years.

      Only in downturns as an "emergency response", but that's when people want to short sell them and when they are most likely to be overpriced.

    • logicchains5 hours ago
      There's no way for foreign investors to have confidence that local investors were allowed to short them, even if it was technically legal, because the government is known for applying extralegal pressure on local firms to go long.
      • andrewflnr5 hours ago
        I mean, they can just see if the prices look like the kind of thing they would want to short if they were allowed. But that really just relates to the overall political impossibility of it.
  • advisedwang6 hours ago
    > What would China actually need to do to make the RMB a global reserve currency?

    > The answer, it turns out, is a five-point plan that is conceptually straightforward, historically grounded, and politically impossible.

    The answer, based on western economic theory. There are other options. An illustrative example is that a military empire can mandate tribute paid in their currency, essentially forcing global adoption. China hasn't shown more of an inclination to economic incentive though. Tie belt-and-roads development to economic integration and RMB will be used, even if there are huge flaws as shown by the economic theory.

    • Muromec5 hours ago
      There is a curious case of Thailand that decided to go ahead with the high speed train project, but refused the funding. Knowing the mood out there a bit, it seems they know what to expect.