why is China in the news this week stating the need to transition the global reserve currency from the USD to the IMF’s currency basket, SDR? doesn’t China hold ~$2T in USD and wouldn’t opening this up for discussion hurt that investment? how would such a transition benefit them?
The Chinese folks are coming to their senses and realizing that the massive inflation of the currency in the US has left them holding over a trillion dollars of decreasingly worthless paper. They are sending a subtle signal to the US they are worried.
Understand that a currency basket is just a bunch of central banks vs a single currency with just one. The only solution is the simple one. The entire world should immediately stop creating new money and then embark on the process to using gold as the currency of the world. Short of this, China should abandon its Mercantilist policies stop this insane export based economic model and allow more freedom for its citizens to perform transactions with other folks throughout the rest of the world.
The situation in the US and in the UK is so dire that they must stop creating currency immediately and work towards reducing the sizes of their respective governments before the current hyperinflation mode of currency creation (The US and UK central banks buy bonds directly from their governments.) translates into rapid increases in prices of goods and services.