No one is talking about the interest of foreign elites, issue is on the those nations wanting to avoid having US exporting inflation to them by playing with interest rate. That alone suffice to make 30+ major trading nations with the Chinese sign currency swap deal.
Which is moot because China do not intent for RMB to be the main reserve currency.
Consider this educational since there were people unironically arguing on the last page for the RMB as the global reserve currency but thought China could get away with closed capital markets, no trade deficit, and no convertibility.
Just a note to all the people on this thread: The Budget Resolution is non-binding and only expresses a sense of the Senate. The actual bills to focus on would be the specific appropriations bills as well as (if they do it), the bills passed through reconciliation & the omnibus
Appreciation can be countered by money printing to inflate the currency which is necessary anyhow to keep up with global demand.
This, above all has the anglo americans spooked; if foreign nations are prepared to pay to hold Chinese debt over US debt, what hope is there for financing the US budget?
If you are printing money to try to deflate the currency, you make imports more expensive (which is problematic when those include natural resources) and engender inflation but more pertinent, financial stability risks.
This is true-ish. The big risk and what you do need to mitigate is currency non-convertibility/capital account issues and that the swap lines are fundamentally unsustainable. You are asking foreign partners to risk devaluations and inflation to get a currency they can never spend?
No, they are buying CGBs because it offers DM-like security at EM interest rates (i.e., above zero). But this wouldn't help you, these are RMB inflows and what you need for a reserve currency are RMB outflows.
