We have the best money. It's just not rational, at this point, for a large exporter to save its money in other than mostly dollar-denominated assets. First, the vast majority of all trades are made against the dollar. Second, the Chinese want maximum leverage to control the value of their currency against the dollar. In a very real sense, you have to have dollars to make your currency a "real" currency, unless, like the British and Europeans, your currency is already a well-trusted international medium of exchange.
boddi
>
> Absence of an alternative is most to the point. If China did not extend
> credit to the US, the US would not be able to buy back China's goods. It was
> the same relationship that Japan had with the US in the eighties, or indeed
> that the US had with Europe throughout much of the twentieth century. On any
> model of capitalism it is always worth remembering that it has to perform as
> a distribution of goods to function. But this is to fix on the most
> superficial aspects. The essence of America's credit rating is the prospect
> that they will continue to generate wealth out of the phenomenally large
> labour force that is put to work there every day; just as the essence of
> China's output is the exploitation of its own workforce.
>
> If anything, the recent record of US militarism would tend to undermine
> rather than reinforce its credibility, and bad news in Iraq often
> corresponds to poor NYSE performance.
>
>
>
> ___________________________________
> http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk
>