How confident are you about HK's economy?

[psjylife]

The US dollar is no longer a good store of value. Even former Federal Reserve Chairman Alan Greenspan said in September 2007 that the euro could replace the U.S. dollar as the world's primary reserve currency.

Papers (authors' surnames only cos I can't be bothered to type the lot) you might wish to read:

Eichengreen
Portes & Rey
Roubini & Ssetser
Persuad & Spratt
Jens
Chinn & Frankel
Rajan & Kiran
Pollar
Hefeker

Thanks for all the references!

I'm not an expert here, but I know that China has for ex a lot of $ in their Central Bank so do lots of countries. Oil is indexed on $..

I find it difficult to imagine that the US and the $ are going to disappear and that Europe is going to emerge suddenly..

[hullexile]

Thanks for all the references!

I'm not an expert here, but I know that China has for ex a lot of $ in their Central Bank so do lots of countries. Oil is indexed on $..

I find it difficult to imagine that the US and the $ are going to disappear and that Europe is going to emerge suddenly..

I don't think anyone is suggesting the US and the $ are going to disappear just lose some of their relative importance.

At the height of the Roman, British, etc, etc, empires I doubt if anyone could imagine them losing their dominance. History teaches us that it happens.

[Safran]

>> Waw, Safran, I think you are quite optimistic about Europe!

Thanks!

>> Saying that we (im French) have overtaken the US seems to be quite ambitious!

Not entirely. According to the IMF in 2007 the EU has a GDP that is 25% higher than that of the US. I believe that in 2008 the gap expanded. Obviously the GDP doesn't really mean anything (and of course the EU has more inhabitants), but I believe that in all important and useful indicators of development, the EU is better off than the US.

>> Also, it will be a long long time before China overtakes the US! Comparison should consider much more than GDP but also as you mention "education/social/human rights".

According to many, the Chinese economy is already larger than the US, if China used a floating exchange rate (though of course again China is much larger, and GDP per capita is still much lower). And the predictions are for the Chinese economy to grow in the next few years (even though little) and the US economy to shrink. I give it 10 years maximum for China to be on a par in global influence with the US.

>> And about the EURO... Well.. this is again very light assumption that it will replace the $ soon...

I wouldn't be so sure. It all depends on central banks and politicians. It could happen tomorrow, if China says that they will sell all their useless greenbacks and buy Euros. Or if all OPEC countries decided to sell their oil in Euros. I am not saying that it will happen tomorrow. I am saying that it can happen within very short time frames if a few people decide to do it. And remember how unpopular the US is, that the Iranian president said OPEC should start selling oil in Euros, that it is in the interest of everybody (including China) to have its foreign currency reserves in a strong, stable currency.

[Claire ex-ax]

It could be that the US dollar and the euro become parallel reserve currencies.

[jimbo]

The US dollar is no longer a good store of value. Even former Federal Reserve Chairman Alan Greenspan said in September 2007 that the euro could replace the U.S. dollar as the world's primary reserve currency.

I wouldn't value his judgement too much as he was behind the keeping of low interest levels and the praising of sub prime vehicles.

[Claire ex-ax]

I wouldn't value his judgement too much as he was behind the keeping of low interest levels and the praising of sub prime vehicles.

You're right. An unfortunate opinion to reference.

A better one?

Jeffrey Frankel, Professor of Economics at the Kennedy School of Government, Harvard University, believes the euro could overtake the dollar as early as 2015.

[gilleshk]

T
The decline of the US won't stop and the US will return to be the Third World country that it has always been (a situation that was eclipsed only momentarily by Europe destroying itself).

That's really funny! You would need Europe to be able to actually act together...

[Safran]

That's really funny! You would need Europe to be able to actually act together...

That should be easy, once the UK joins its master.

[back2HK]

http://72.14.235.132/search?q=cache:...&ct=clnk&cd=24

The late Milton Friedman, economic guru of Thatcherism, said that it would be impossible to judge whether the euro was a success until it had to cope with a recession. The single currency will face its greatest test in the next few months as the economic conditions and economic policies of the 16 euroland countries diverge sharply in the face of what may be the worst, global recession for seventy years.

At least six euroland nations – Greece, Ireland, Spain, Belgium, Portugal and Italy – are building what may turn out to be unsustainable new mountains of private and public debt. They are, up to a point, sheltered by the euro because they have no national currency to collapse, as Iceland’s did. But they face increasing difficulties, and expense, in finding buyers for government debt. Greece already has to offer interest rates more than 2 per cent more than Germany – compared to 0.2 per cent more before the crisis.

[hullexile]

http://72.14.235.132/search?q=cache:...&ct=clnk&cd=24

I met the man once, a total shit. Came across as highly xenophobic. Completely arrogant that his views were the only correct ones. Shame he died before his model disintegrated. Perhaps his hell is to watch all the government intervention going on now?