I was all set to write about the Iranian election and the importance of winning versus symbolic showing (think US Presidential Election circa 2008 or 2000 or 1960), then I read Taibblog's entry on CCB denominating loans in yuan instead of dollars. This is a problem. If countries begin denominating intl loans in the yuan, yen or euro in any material uptick the dollar could be in serious trouble. The demand for countries to purchase our dollars to hold in reserve or to pay back intl loans in whatever currency is what keeps the greenback strong. Should that interest wane the dollar becomes less demanded and more weak, again not good.
I guess the only thing that has kept this from happening en masse is the political stability and economic power (current environ kinda excluded) of the US still trumps other industrialized states. If I'm Brazil and I need a $100M line of credit to necessitate oil development do I want to be responsible for paying that back in yuan, when the Chinese govt, on a whim (or a coup), can materially affect the real/yuan exchange rate?
