The International Monetary Fund added the Renminbi – How this will destroy Currencies as we know it today
On Monday November 30, 2015 the International Monetary Fund finally gave the nod for the renminbi to join its elite basket of reserve currencies, taking effect October 1 2016.
What does this really mean you ask?
How will this destroy the concept of currencies we know today?
Well to keep this as short as possible China will now have the IMF backing their destruction of other currencies.
Japan’s strategy has always been to lower their currency to compete and it’s worked, however the difference between China and Japan is about a billion people and GROWING plus a communist dictatorship.
With the renminbi being added what this really means is China can better control inflation and/or hyper-inflation.
Not only can China better control inflation but China can also wipe out any manufacturing competitor with the backing of the IMF.
China can print money whenever they want too, just like the U.S which allows them to better control inflation.
Now what I will say to people is… China is probably the last currency you’d want to buy unless of course you want to invest in something that will depreciate.
Up until November 30, 2015 there were domestic financial problems that would arise in China with government intervening, NOT ANYMORE! That problem is officially solved and it was solved under a Chinese communist dictatorship!
What I’m saying here sounds really basic in nature, but when the world gets a dose of the reality, one of two things will happen
- Either China will get thrown out of the basket of reserve currencies
or…
- the concept of currency as we know it today will change or maybe even cease to exist.
In my post Fiat Currency vs. Gold Standard I talk about my preference for fiat currencies, well with this move I’d advise anyone reading this to stock up on silver and gold. It should be noted that China has already been stock piling it’s silver and gold reserves in preparation of being added to the world’s reserve currency list.
The Chinese did this for one reason and that reason is when they start to use their world reserve currency the way the Americans do they’ll be able to legitimately challenge the IMF, when other countries protest the Chinese will have a “legitimate” argument.
Prediction Alert: China Will Devalue Its Currency Over and Over and Over Again!
Don’t forget China already manufactures/assembles most of the world’s goods. Do not under-estimate the Chinese they have some of the smartest and brightest people on planet earth and the reality is they’ve out-worked the other world powers.
So with that said….
My Personal my advice to people who predict a currency crash. Buy silver over Gold because, I’m not saying not to have Gold in your possession what I’m saying is look at gold like have $100 bills in your pockets and look at silver as $5, $10’s, and $20’s. I like to remind people that Judas sold Jesus using silver Thirty pieces of silver not GOLD!
The only thing that can stop one of the two aforementioned scenarios above from occurring is a revolution in China that would take down their dictatorship government.
In a dictatorship the government has to do only one thing and that is keep the people happy. In order for the Chinese government to keep their people happy in a global economy they’ll have to wipe out or minimize global competitors.
It may not seem obvious in the next 5 years what China is going to do but just wait and see, once life starts to get more expensive for everyone else on the planet and cost of living starts to soar globally that’s when people will realise the huge mistake the IMF made by adding China to the world’s reserve currency list.
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