China, Russia quit dollar

ChinaDaily ^ | 2010-11-24 07:55 | Su Qiang and Li Xiaokun

[ConfusedSwede]

"St. Petersburg, Russia - China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.

Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies."

[Former Proud Canadian]

Ummmm. Isn’t this really big news?

[ConfusedSwede]

I do not know. It seems to be.

[LaineyDee]

Isn’t this what Glenn Beck said would happen just before we go into a full-blown economic collapse?

[anniegetyourgun]

Huge....while Obama admin keeps rearranging the deck chairs.

[taxtruth]

Yes it is and I don’t see a lot mention of it in the American press.

[Frantzie]

Nah. Dancing with the Stars, football games and other nonsense on ALL Obama TV is more important. Idiots who watch TV enable and empowered Obama including Prince Al Waleed’s Fox News.

The new reality will be dawning soon. Also thank the idiot anti-birthers who post here deserve credit. Old folks and baby boomers are so screwed.

[berdie]

later

[ColdOne]

I Googled that and it is not in any American news sites. It for me is HUGE too.

[Former Proud Canadian]

There have actually been rumblings about this in the past, notably the arabs wanted a "basket of currencies" for their oil, but nothing came of it.

It would seem to be huge, but I don't really know how much difference it would make. In practical terms it means that if you are a Russian buying Chinese goods you can pay for them in roubles rather than buying US dollars, if the entity you are buying them from accepts roubles.

This could be a one of. It might not work. On the other hand, if other countries start to join this and it becomes a trend, that would spell trouble for the dollar.

[wagglebee]

I Googled that and it is not in any American news sites. It for me is HUGE too.

It's probably not on any American news sites because it doesn't really affect America.

NEITHER China nor Russia "quit" the Dollar. They both fully intend to continue taking US Dollars as currency, NOTHING has changed there.

This agreement between China and Russia only deals with an agreement for trade between China and Russia. China will start accepting the Russian Ruble and Russia will take the Chinese Yuan. This is a trade agreement between China and Russia that has ZERO EFFECT on any other nation.

[Psalm 144]

That’s gonna leave a mark.

[The Comedian]

This is a trade agreement between China and Russia that has ZERO EFFECT on any other nation.

Wrong, as usual.

1) It sets the precedent for non-US denominated energy, food, and other asset sales, cutting into the USD's status, not to mention geographical reach, as the world reserve currency.

2) It returns the total pool of US dollars currently tied up in Sino/Russian trade back in to the global M3, devaluing the dollar.

3) It excludes (and this is critical) the SWIFT and US banking infrastructure from ALL Sino/Russian trade. No clearning houses, no transaction tracking, no US jurisdiction bank accounts. This means untraceable PRC/neo-Soviet financial transactions.

Frowning takes 68 muscles.
Smiling takes 6.
Pulling this trigger takes 2.
I'm lazy.

[ColdOne]

This is a trade agreement between China and Russia that has ZERO EFFECT on any other nation. THANK YOU for clearing that up. Happy Thanksgiving to you wagglebee!

[ColdOne]

WOW then it is not OK.. Very troubling these days are.

[wolfcreek]

Since nearly everything is tied to the global economy, does this mean we’ll miss out on any profits from transactions between those countries?

[TopQuark]

Excellent analysis; thanks.
BTTT.

[wagglebee]

What you say is POSSIBLE in theory.

In reality, this agreement will probably collapse within a year when either the Russians, the Chinese or both get angry about currency manipulation by the other.

There seems to be a new industry predicting the "collapse" of the USD, the reality is that this has been going on for decades. The USD was supposed to be replaced by then Yen, then the Euro and now some as-yet-unnamed currency. The reality is that the USD is still by far the most stable currency out there.

Will the Dollar eventually be supplanted? Probably, but that's a long way off. The British Pound was the major currency until it was replaced by the Dollar in the mid-20th century, but it is STILL a major corrency.

[edcoil]

Tell them we only pay in dollars guess we have a debt to no-one.

[Greysard]

In reality, this agreement will probably collapse within a year when either the Russians, the Chinese or both get angry about currency manipulation by the other.

The whole reason for them to drop USD and switch to their own currencies is the currency manipulation by the USA. So they obviously trust each other more than some third country that is totally unaccountable to either of them.