Multipolarity

Yuan Way Or Another, Korea Advice, Dollar Save Club

Apr 25, 2024

The podcast delves into China's possible devaluation of the Yuan to boost exports, South Korea's economic challenges with a declining birth rate, and the potential impact on US living standards if the dollar loses its reserve currency status. The discussion includes complex global trade dynamics, demographic shifts in South Korea, and the implications of a sudden global trade rebalancing.

59:37

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Quick takeaways

China may devalue yuan to boost exports amid US interest rate differences.

South Korea faces economic challenges with low birth rates and GDP decline.

Potential loss of US dollar's global reserve status could lead to significant living standard decline in the US.

Deep dives

Impact of China's Currency Devaluation on Export Strategy

China's potential devaluation of the yuan could impact its export strategy, as a higher US interest rate compared to China's could lead to a devaluation. This move aims to boost Chinese exports by making them cheaper for other countries. The US concerns about market share competition may overlook the influence of interest rate dynamics driving China's devaluation.

The Dollar Save Club

01:20

The Importance of Carry in Financial Markets

01:20

Introduction

2min

Unpacking China's Currency Devaluation and Global Trade Dynamics

28min

South Korea's Economic Success and Demographic Challenges

9min

Comparing Economic Shifts: China and South Korea

5min

Discussing South Korea's Potential Alignment with the US Amid Economic Challenges and Competition

3min

Implications of Dollar's Reserve Currency Status on US Living Standards

8min

Speculation on Sudden Global Trade Rebalancing and Economic Threats

3min

Like Germany hiding in the Euro, China have long played the game of keeping their currency soft, to juice their exports.

But now, with the accelerator still jammed to the floor on US inflation, it seems that the powers in Beijing might be looking to devalue the Rimimbi even further.

Everyone plays currency games - the trick is not to get caught. And the problem for China might be that they’re on the brink of embarrassing their adversaries.

Meanwhile, what happens when a miracle becomes a conjuring trick?

After forty years of weaving economic magic, the South Koreans now have the world’s lowest birth rate — and GDP slumping back towards developed economy norms. Are they about to become an early Eastern front runner of the social problems of the west? And can they afford that - given their tough geopolitical neighbourhood?

Exorbitant privilege is what they call the US ability to print the global reserve currency.

So what if the privilege was revoked?

Plenty of apocalyptic fiction has been written about that moment. But this week we’ve done the modelling to put a number on the dent in US living standards.

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Be excellent to each other, and -

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