IMF Replaces US Dollar With YUAN

China wants its currency, the yuan, to replace the U.S. dollar as the world's global currency. That would give it more control over its economy.
China's economic might grows, it's taking steps to make that happen. A slim majority of institutional investors see it as inevitable, but don't say when.1 Could we see a switch from a greenback to a redback-dominated world? If so, how and when would that happen? What would be the consequences?
Before the yuan can become a global currency, it must first be successful as a reserve currency. That would give China the following five benefits:

1. The yuan would be used to price more international contracts. China exports a lot of commodities that are traditionally priced in U.S. dollars. If they were priced in yuan, China would not have to worry so much about the dollar's value.
2. All central banks would have to hold yuan as part of their foreign exchange reserves. The yuan would be in higher demand. That would lower interest rates for bonds denominated in yuan.
3. Chinese exporters would have lower borrowing costs.
4. China would have more economic clout in relation to the United States.
5. It would support President Jinping's economic reforms.

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Effects of a Dollar Collapse

A sudden dollar collapse would create global economic turmoil. Investors would rush to other currencies, such as the euro, or other assets, such as gold and commodities. Demand for Treasurys would plummet, and interest rates would rise. U.S. import prices would skyrocket, causing inflation.

U.S. exports would be dirt cheap. This would give the economy a brief boost. But in the long run, inflation, high interest rates, and volatility would strangle possible business growth. Unemployment would worsen, sending the United States back into recession or even a depression.       SOURCE:  THE BALANCE

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If the dollar loses its status as the reserve currency, it would be a major shift in the global economy the likes of which only happens once or twice a century. What happens then is anybody’s guess. The result could be chaos if it’s mismanaged; but if it’s handled well, the loss of the reserve currency could be healthy for the U.S. and the world. Indeed, given the U.S.’s waning economic dominance, the consequences of keeping the dollar as the sole reserve currency could be worse.

Because the dollar is the reserve currency, central banks around the world hold large amounts of dollar-denominated assets, mostly U.S. government bonds. They hold these reserves for a number of reasons: to maintain exchange-rate pegs, to insure against capital outflows and to facilitate international trade.    SOURCE:  BLOOMBERG

COMMENT:  Most everyone believes that the USA will never lose its IMF status as being the INTERNATIONAL CURRENCY OF TRADE...  and, while that is reassuring for people to think and say, it does not mean that it could, one day, happen...  and, the main reason for something like this to actually take place would be the USA not paying down its NATIONAL DEBT or not STOPPING THE INCREASE of the National Debt.

Social Programs that are desired by the Progressive Liberals of the Democratic Party, could cause our NATIONAL DEBT to substantially increase and it would be illogical to think that raising taxes on the wealthy and corporations would take care of those increases, especially when the wealthy are incredibly SAVVY about sheltering their monies away from taxes.

Increases in taxes on corporations would cause our economy to grow at a much slower rate as people would be hired to work at a much slower pace to compensate for the increased expenses.

THE USA IS GETTING DANGEROUSLY CLOSE TO FACING A FINANCIAL CRISIS WITH ITS DESIRE TO PROVIDE MORE AND MORE FREE SERVICES TO ITS CITIZENS...  BUT... THAT CONCERN IS BEST REALIZED RATHER THAN ANTICIPATED...