In a World Economy, One Currency to Rule Them All, Could the World be in Trouble?

The biggest expanding country in the world could be the biggest threat to the world economy. China has a growing list of superiority, including a fifth of the world's population, one of the largest countries in land mass, and the largest standing army just to mention a few. Its current government is only a little over a half of a century old, but has already been climbing to the top of the food chain; in terms of its economy. The state of its economy has been growing at an incredible rate over the years, landing at the second largest exporter and third largest importer of goods. China has always been one of those countries that are always in the news, both being presented as a positive and negative state in the world economy. Living in a tough time and a declining economy, who will come out on top?

We are living in a world economy and what happens in other parts of the world directly and/or indirectly affect the rest of us, whether we like it or not. With other countries' economies falling apart, eventually something will have to happen that will stabilize this event. The U.S. Dollar has been stable during this decline so far, even gaining strength against other currencies but so has the Chinese Yuan. In terms of money and the exchange of money, most countries have an amount of U.S. Dollars in some form; it's on its way to being a world currency. The only thing that is in its way is the Chinese Yuan.

If the Chinese economy is compared to historic events, it does resemble the United States' economy during the Industrial Revolution. If they stay on this track, that would lead them to become the most powerful country on the map. The difference now is technology. During the 18th century, there was the introduction of steam energy, today we have nuclear power. An economy growing at the rate of China's, people and businesses look forward to doing business there instead of other places. The costs of labor is cheaper and let's face it, they have the labor force to complete the job. This is great for China, but hurts other countries; jobs are outsourced and so is manufacturing. More money is being invested in their country, leaving room for expansion while other countries are at a standstill. The technology aspect can makes them a force to be reckoned with.

All this growth makes the Yuan more appealing. If other currencies decline in value, we can see a future with a world currency. The obvious choice for this currency is the U.S. Dollar; it's already being used in this way just not official. So what's the problem? The U.S. economy is not so great right now and the government is spending money like there's no tomorrow, but there is a tomorrow. The Dollar could also implode in the next few years and the Yuan is gaining in value against it. So what's the big deal? We do live in a world economy, not everything has to be in favor of the free world. The Chinese government, socialist republic ruled by Communist, and most of the world is against this form of government. If we can learn anything from history, Communist don't usually get along with most other forms of government. If they control the world currency, are expanding beyond everyone else, advancing in technology, ruled by Communist, and oh yea have the largest standing army in the world sounds like a formula for disaster.

China is a great place for expanding a business or getting cheaper labor, but at what cost in the end. Leaders have been known to get power hungry and run government in a way that is great for them and not the people they are ruling. When failing governments look for help, China can help in big ways, but China's history is a little all over the place with change of power. An unstable government in control of the world's assets smells like trouble.

Not saying this will happen, just making sure everyone is looking at all the possibilities. The world is changing; let's make sure it goes in the right direction. If we look back at history, we can see it has a habit of repeating itself. Great nations rise and fall, times of war and peace, but when the dust settles a leader rises up; hopefully for the world it is the right person for the position. Investing in China and reaching for their hand in help, is looking better more than ever and it is helping those struggling through this tough time. But we should make sure not all of the help and investments are in one area. Just like investing on Wall Street, if you put everything you have in one stock and that company folds up your portfolio is worth nothing. Let's be smart about where our future is going.