China, Russia to drop dollar in bilateral trade !
HONG KONG (MarketWatch) -- China and Russia will stop using the U.S. dollar to settle bilateral trade and instead use the ruble or the yuan, though the move is not meant to signal a challenge to the dollar, according to reports Wednesday. China's Premier Wen Jiabao and Russian President Vladamir Putin made reference to the new currency trade pact late Tuesday, following meetings in St. Petersburg that also saw the signing of bilateral trade and energy-cooperation agreements, according to a report in the state-run China Daily. "About trade settlement, we have decided to use our own currencies," Putin told reporters, according to the report. Earlier this week, China added the ruble to the list of currencies that can be traded against the yuan on its domestic exchange.
This may not be as bad as it appears, as in 2009 the Russians and Chinese stated the same intent, and not much has happened. Also the Chinese own 3 Trillion in US securities, so they are caught in a catch 22 when they try to do anything that would devalue the dollar.
ReplyDeleteMore info here- http://www.zerohedge.com/article/much-ado-about-nothing-china-russia-drop-dollar-bilateral-trade
And this sourced DOES NOT present a rosy picture of the US economy at all, but just points out that this action is more posturing then substance. Zerohedge sees the future of the US economy as bleak to say the least.
China wont have to do anything to devalue the dollar...The Fed is doing a great job all by itself!
ReplyDeleteChange is coming...the trashing of the dollar in favor of the new North American currency ( ie, Amero ).