Robert Triffin said that the US must run trade deficits to ensure sufficient dollars abroad to be a reserve currency. That would eliminate the yuan from this role. But he was wrong.
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It is important to understand why international trade can continue without the dollar, in the context that economists dismiss this role being fulfilled by China’s renminbi (yuan). We all know how dominating the dollar is, and despite the much-heralded end of the petrodollar while the yuan is gaining some traction, we are told it cannot ever become a serious threat to the dollar’s role.
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