On Oct 19, 10:45 pm, mtfes...@netMAPSONscape.net wrote:
> Declan Murphy <declan_mur...@hotmail.com> wrote:
> > On Oct 19, 12:34?pm, mtfes...@netMAPSONscape.net wrote:
> > > > Why would the PBC want to or need to float? The yuan isn't a reserve
> > > > currency, or even a major traded currency, and isn't likely to be for
> > > > about a generation. They won't even need to think about a dirty float
> > > > or banded ERM for another 15 years or so.
>
> > > So what other currencies did you have in mind? Yen? Rupees? Sparkly dust?
> > I kinda like the sound of sparkly dust as a future currency unit.
> > Rupees won't be used as a reserve for the same reasons as the yuan. My
> > guess is a mix of USD$, Euro, Sterling and Yen will act as reserve,
>
> Japanese have been noticably reticent about using the Yen in this fashion.

Japan doesn't have any choice about the matter. The yen is already
used as a minor reserve especially by east Asian countries. There are
advantages and disadvantages in having your currency unit held by 3rd
parties as official foreign exchange reserves, but if you have a
floating exchange rate then it is largely outside your control and
always will be. The eurodollar and petrodollar markets for instance.

> Not sure the pound has the international appeal anymore.

Since the Euro was launched, the pound's share of global official
foreign exchange reserves has doubled due mainly to carry trade. Its a
useful proxy to the Euro and the 3rd most held currency unit
worldwide.

> > Brent Index will switch to euro sometime before 2020, and that US
> > treasuries will need to be priced at least 25-50 basis points higher
> > than would otherwise be the case due to exchange rate risk associated
> > with gradual depreciation as the US Fed inflates away some of the
> > debt. My other guess is that I will need to learn more about
> > Californian wine.
>
> Comes in red, white, and pink.
>
> What else do you need to know?

I think I'll be concentrating on the reds at this stage.