"2012 could see the beginning of large scale defections from the dollar settlement currency. Which would in turn have massive, perhaps even catastrophic consequences for how the world perceives what an acceptable level of debt for the US is. What is acceptable when you have the global reserve currency is quite different from what is acceptable when you don’t.
And the reverse is also true. If China can transform the network of bilateral agreements which centre upon China and the Yuan, in to becoming accepted as a de facto reserve currency, then for those, like me, who wonder how China can possibly avoid a hard landing as its bad bank and property bubble deflates faster and faster, look no further."
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