KUALA LUMPUR, Sept 3 — Prime Minister Tun Dr Mahathir Mohamad said today he will not be surprised if the Chinese yuan takes over the United States dollar as a global trading currency.
Speaking at University of Brunei today, the 93-year-old prime minister pointed out that 1.4 billion Chinese who are very productive, dynamic and wealthy might just decide that anyone trading with them must use the Chinese currency rather than the US greenback.
“Imagine 1.4 billion Chinese who are very productive becoming very, very rich... why should they use the US dollar? They are the people with the money, property with the wealth.
“So one day they may decide that if you want to buy, you have to use the Chinese currency. And you will have no choice, you will have to use Chinese currency. I don’t know how long we can resist, but it will come one day,” Dr Mahathir said.
However, he also pointed out that such a move will definitely displease the United States of America which will go bankrupt if the US dollar is no longer used as the world’s trading currency.
Explaining how the US currency became the world standard, he said at one time an ounce of gold was the equivalent of US$36 (RM148), but today the price is US$1,200, forcing America to go off the gold standard while “maintaining the fiction that it carries the same value”.
“Now one ounce of gold is about US$1,200. That’s how much the US dollar has depreciated but we have been brought up to think of the US dollar as the standard. Why should the US dollar be the standard?
“Other currencies too can be the standard but the US will feel very unhappy if you drop the dollar as the standard for currencies. If you don’t use the US dollar, the US will go bankrupt immediately because it owes the world 14 trillion dollars which they cannot pay.
“They don’t have that much gold to pay. So if you switch from US to the Chinese currency, the US is going to feel very unhappy and I think some people had ideas about that and they have been taught not to have such ideas,” he said.
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