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Thread: Dollar on the road of extinction as reserve currency

  1. #31

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    Quote Originally Posted by Jordan View Post
    Still the best-worst currency in the world. I'm still accepting dollars.
    of course you should accept USA dollars, but also Hong Kong dollars, British pounds, Swiss francs

    reserve currency means currency held by other central banks, in lieu of gold.

    the USA dollar being diminished is a good thing, as it will increase the use of gold, and diminish the USA governments ability to bully other countries (the Swiss on bank secrecy, the Ukrainians on copyright nonsense-the list is endless)



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  3. #32
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    Quote Originally Posted by cindy25 View Post
    the USA dollar being diminished is a good thing, as it will increase the use of gold, and diminish the USA governments ability to bully other countries (the Swiss on bank secrecy, the Ukrainians on copyright nonsense-the list is endless)
    true, but then again as long as there is central banking there will always be this kind of bullying... it's the USA now... tomorrow, China?

    death to central banking...
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  4. #33

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    Quote Originally Posted by kety View Post
    As you probably know, China and Russia are doing everything to collapse dollar as world's reserve currency.

    Today, China have a agreements with more than 35 countries that includes direct trade without dollar with Germany, Russia, Japan, Australia, N. & S. Korea, Turkey, Brazil, South Africa, India, Iran, and so on; all countries from BRICS block are doing trade without dollar with each other and for the first time and most important of all - Russia is selling oil in their own currency - ruble and chinese reninmbi and all former Soviet Union block are doing trade in ruble.

    I'm from Serbia, so you probably don't know what's happening outside of US, but in Europe in general, everyone is trying not to use dollar anymore in their trades. From few days ago, even Serbia and Russia have started doing trade without dollar as reserve currency.

    Therefore, I would like to know your opinion about future of the dollar and his geopolitical influence? Will US be able to succeed to save their currency in present form, precisely, will be able to regain its former glory or the dollar will continue to fall down?


    Best wishes,
    Ivana.
    Првивет!
    Being a Russophile and student of Russian language/culture, I follow Russian news and have read/heard a bit about this. I am of the opinion that, barring something strange happening, the downward spiral of dollar hegemony will go on for some years (perhaps decades depending on what tricks TPTB can pull out their asses) and eventually the dollar will no longer be the world reserve currency. The Euro seems to be the next Big Reserve Currency at this time. (the EuroZone is a financial mess, but they aren't engaged in perpetual war and their spending isn't quite as insane...but it's close) Could be Chinese Renminbi too...I know even less about that than i do about the Euro. :/
    Last edited by heavenlyboy34; 01-01-2013 at 11:41 PM.
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  5. #34
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    Quote Originally Posted by heavenlyboy34 View Post
    Could be Chinese Renminbi too...I know even less about that than i do about the Euro. :/
    I don't think Americans would accept the RMB as the world's reserve currency without a war. The Euro may be a bit more palatable, but I'm fairly sure our country's pride couldn't handle the RMB
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  6. #35

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    Quote Originally Posted by bxm042 View Post
    I don't think Americans would accept the RMB as the world's reserve currency without a war. The Euro may be a bit more palatable, but I'm fairly sure our country's pride couldn't handle the RMB
    Could well be. That would be rather good though, as it could motivate people. But I try not to have too much faith in almost all my countrymen. They've disappointed me far too many times.
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  7. #36

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    Quote Originally Posted by bxm042 View Post
    I don't think Americans would accept the RMB as the world's reserve currency without a war. The Euro may be a bit more palatable, but I'm fairly sure our country's pride couldn't handle the RMB
    Americans wouldn't have to use the rmb for daily trade so Im not so sure it's as big a concern as you make it. The value of the dollar will crash and cause uproar for that reason but it wouldn't mean that Americans would suddenly have to use chinese money with pics of Mao on it or whatever. The dollar is the global reserve currency but you don't see it being the official money of practically anywhere except here. This mainly affects giant corporations, gov't debt auctions, and central banks.
    Last edited by devil21; 01-02-2013 at 05:41 AM.
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  8. #37
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    It's happening faster than ever

    Bank of England Closes In On China Currency Deal

    Sir Mervyn King, Governor of the Bank of England, is on the brink of striking
    a deal with the People's Bank of China which would cement the UK's role as
    the leading G7 trade hub for the world's fastest growing currency.

    The Bank of England expects to sign a final agreement to set up a three-year
    yuan-sterling swap line "shortly", during a meeting between Sir
    Mervyn and his counterpart Zhou Xiaochuan in Beijing.

    Beijing is slowly delivering, although it still keeps a tight rein on gains
    for the currency for fear it will weaken its export-powerhouse economy,
    which has been the biggest engine of global growth for a decade.

    This would be the latest in a string of bilateral currency agreements that has
    seen cross-border trading of the yuan expand four-fold since August 2010,
    and the first with a major developed economy.

    Britain's central bank has been eyeing such a deal for some time, saying last
    month it was ready "in principle" to adopt a currency swap line
    with its Chinese counterpart as the yuan starts to emerge as a world reserve
    currency.

    http://www.telegraph.co.uk/finance/c...ency-deal.html

    Ok, I think it's now like 80% or even more of the world that has dropped the dollar in trade with China and their neighborhoors.
    Last edited by kety; 02-24-2013 at 09:17 AM.

  9. #38

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    Quote Originally Posted by DFF View Post
    Anybody who's dissatisfied with dollars, please, give them to me!

    I would give them to you, but the cost of living is increasing so fast, there are none to give.
    there is a big sucking sound going from the poor and middle class to their masters in DC.

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  10. #39
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    Russia wants to strengthen influence of BRICS

    March 12, 2013 Konstantin Garibov, The Voice of Russia
    The initiative calling for a more influential BRICS has been formulated in a report prepared by Russian experts for the next summit in Durban on March 26.

    Russia suggests strengthening the influence of BRICS that embraces Brazil, Russia, India, China and South Africa. The initiative has been formulated in a report prepared by Russian experts for the two-day summit of the grouping that will start in Durban on March 26.

    Experts insist on the need to setting up a permanent secretariat, originally virtual and then a full-pledged one. Last year, India suggested creating a new development bank. The authors of the report proposed to set up the headquarters of the bank with an authorised capital of $50 billion in Moscow. Last spring, the partners of the BRICS summit in New Delhi decided to trade in local currencies and replace the United States dollar as the main unit of trade between them. In view of this, Russian experts propose to create a bank for international settlements to assure safety to the economies of BRICS member countries from sharp fluctuations of the exchange rate of the dollar and the so-called “currency-wars.” Russian experts have also proposed to set up an anti-crisis fund of $240 billion amidst the second wave of the global financial crisis.

    The Russian initiatives are aimed at strengthening integration, says Andrei Volodin, expert at the Diplomatic Academy of the Russian Foreign Ministry. The reason here is that at present, economic integration between BRICS member countries is clearly insufficient.

    Russian experts in economic integration suggest supplementing it by the joint work in security area. Among these are fighting against the spread of weapons of mass destruction, cybercrimes, drug trafficking and piracy. It has been proposed to admit an Islamic country, Indonesia or Turkey, to upgrade the organization’s humanitarian and inter-civilisational potential.

    The report also pays attention to the contradictions within the BRICS. Its authors describe territorial disputes between China and India, competition for raw material resources and differences in the approaches towards climate change as time bombs. Russia can use its prestige to convince its partners to ease strain amongst themselves. Co-chairman of the Council for National Strategy Iosif Diskin agrees with the experts.

    “Russia’s partners have displayed keen interest in its active economic and foreign policy position and Russia has a unique possibility of multiplying its economic and political influence,” says Diskin. However, no one should forget that the West sees its rival in BRICS. Consequently, it will try not to give an opportunity to strengthen the five countries on the international scene. The report prepared by Russian experts for the government is aimed at hampering such a development. It will be the basis of the drafting of Russia’s national strategy in the framework of BRICS.

    http://indrus.in/economics/2013/03/1...ics_22833.html
    Last edited by kety; 03-13-2013 at 09:39 AM.

  11. #40

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    Quote Originally Posted by kety View Post
    You mean their trade agreements will be finalized as todays agreements cease to exist or they'll sign a new agreements within the block?

    Ivana.
    I believe it is other agreements that will be executed within the block and those who will be trading with the block. It could also be some of the current ones are not finalized. I would need more data on hand. The information we get mostly comes from press releases.
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  12. #41

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    Quote Originally Posted by kety View Post
    Russia wants to strengthen influence of BRICS

    March 12, 2013 Konstantin Garibov, The Voice of Russia
    The initiative calling for a more influential BRICS has been formulated in a report prepared by Russian experts for the next summit in Durban on March 26.

    Russia suggests strengthening the influence of BRICS that embraces Brazil, Russia, India, China and South Africa. The initiative has been formulated in a report prepared by Russian experts for the two-day summit of the grouping that will start in Durban on March 26.

    Experts insist on the need to setting up a permanent secretariat, originally virtual and then a full-pledged one. Last year, India suggested creating a new development bank. The authors of the report proposed to set up the headquarters of the bank with an authorised capital of $50 billion in Moscow. Last spring, the partners of the BRICS summit in New Delhi decided to trade in local currencies and replace the United States dollar as the main unit of trade between them. In view of this, Russian experts propose to create a bank for international settlements to assure safety to the economies of BRICS member countries from sharp fluctuations of the exchange rate of the dollar and the so-called “currency-wars.” Russian experts have also proposed to set up an anti-crisis fund of $240 billion amidst the second wave of the global financial crisis.

    The Russian initiatives are aimed at strengthening integration, says Andrei Volodin, expert at the Diplomatic Academy of the Russian Foreign Ministry. The reason here is that at present, economic integration between BRICS member countries is clearly insufficient.

    Russian experts in economic integration suggest supplementing it by the joint work in security area. Among these are fighting against the spread of weapons of mass destruction, cybercrimes, drug trafficking and piracy. It has been proposed to admit an Islamic country, Indonesia or Turkey, to upgrade the organization’s humanitarian and inter-civilisational potential.

    The report also pays attention to the contradictions within the BRICS. Its authors describe territorial disputes between China and India, competition for raw material resources and differences in the approaches towards climate change as time bombs. Russia can use its prestige to convince its partners to ease strain amongst themselves. Co-chairman of the Council for National Strategy Iosif Diskin agrees with the experts.

    “Russia’s partners have displayed keen interest in its active economic and foreign policy position and Russia has a unique possibility of multiplying its economic and political influence,” says Diskin. However, no one should forget that the West sees its rival in BRICS. Consequently, it will try not to give an opportunity to strengthen the five countries on the international scene. The report prepared by Russian experts for the government is aimed at hampering such a development. It will be the basis of the drafting of Russia’s national strategy in the framework of BRICS.

    http://indrus.in/economics/2013/03/1...ics_22833.html
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  13. #42
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    Quote Originally Posted by devil21 View Post
    Americans wouldn't have to use the rmb for daily trade so Im not so sure it's as big a concern as you make it. The value of the dollar will crash and cause uproar for that reason but it wouldn't mean that Americans would suddenly have to use chinese money with pics of Mao on it or whatever. The dollar is the global reserve currency but you don't see it being the official money of practically anywhere except here. This mainly affects giant corporations, gov't debt auctions, and central banks.
    The ramifications of having the RMB replace the dollar as a reserve currency go far beyond jyst what currencies are used in global trade. It would effectively mean China would be the worlds new superpower and all would be expected to bend to its will, as the world is expected to bend to our will, now
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  14. #43
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    I don't want to sound pesimistic, but this is serious:



    A new report by the World Gold Council, “Central bank diversification strategies – rebalancing from the dollar and the euro”, examines the growing trend of central banks’ actively looking to diversify their reserve portfolios. While the dollar is still the primary global currency, its long-term dominance is less certain. In response, central banks are reducing allocations to US dollars and euros while increasing purchases of traditional assets such as gold and Japanese yen and new alternatives including Chinese renminbi.

    The official reserves of global central banks have grown from $2 trillion in 2000 to more than $12 trillion in 2012. During this same twelve-year period the data shows significant shifts away from the US dollar while the share of “other” currencies in reserve composition has tripled in absolute terms since 2008.

    Gold has a long history as a reserve asset for central banks, and as such is considered a traditional one. Gold is statistically uncorrelated with other traditional reserves and new alternatives, making it one of the most important assets for diversifying out of the US dollar and euro. In line with this trend, central bank gold buying in the fourth quarter of 2012 marked the eighth consecutive quarter of net purchases by the official sector and the highest level since 1964.

    Ashish Bhatia, Manager for Government Affairs at the World Gold Council said:

    “Building gold reserves in tandem with new alternatives is an optimal strategy as central banks remain under-allocated to gold and many attractive alternatives are either too small or, as is the case with the renminbi, not yet open to broader international participation.

    “Gold has a deep and liquid market with no credit risk, making it one of the most attractive assets for central banks to consider as they diversify away from the US dollar and euro. Gold’s tail-risk hedging properties add to its appeal as a particularly valuable component of a diversified reserve portfolio.”

    The study is predicated on the assumption that central banks will continue to hold 65% of their assets in dollars and euros, while looking for high quality alternatives including Chinese, Canadian, Australian, Swiss, and Danish denominated assets for the balance of their reserves. It quantifies the benefits of these alternatives using portfolio optimisation methodology and examines their diversification benefits while providing context for potential limits to their use due to limited availability or access.

    Key findings include:

    Chinese renminbi and Australian assets emerge in this study as important assets for diversification. However, in the portfolio optimisation analysis which took into account market size and access constraints, gold received a prominent 8% allocation, surpassing the 4% allocation to renminbi and 3% to Australian assets. Gold’s allocation was matched only by Japanese yen which was also weighted at 8% of the optimised portfolio.
    Due to the large size of the gold market, approximately $3.2 trillion, central banks have sufficient access to gold for large investments. The gold market is highly liquid with average daily trading volume estimated at $240 billion.
    Emerging market central banks are investing in assets denominated in the following currencies: Canadian dollar (CAD), Australian dollar (AUD), Swiss franc (CHF), Danish krone (DKK) and Chinese renminbi (CNY). Given part of the strength of alternative assets is related to economic growth and commodity sector strength, these assets also carry risks that are associated more broadly with economic cycles.
    The size limitation of alternative reserve assets actually re-emphasizes the role traditional assets can play in diversification. In the market scenario optimisation, which adjusts for the market size of a particular asset, there is a greater allocation to traditional assets such as gold (8%), JGBs (8%), and Gilts (6%), than to alternatives such as the Swiss franc (1%), Danish krone (1%), and Australian dollar (3%).
    Despite the attraction of the Chinese renminbi market, it remains difficult to access. Foreign investors must be part of the QFII programme which currently consists of approximately 13 central banks and sovereign related entities. Participation by individual institutions is limited to $1 billion, which is too small to provide adequate scale for central banks.

    This analysis demonstrates that gold and traditional reserve assets can play a complementary role alongside alternative assets as central banks seek diversify their US dollar and euro heavy reserve portfolios. The results suggest it would be prudent for reserve managers to build gold reserves to achieve optimal levels relative to other traditional and alternative reserve assets.

    http://www.gold.org/media/press_rele...press_release/

    Though if you take a look at paper, euro shares actually increased to 22% from 16%, meanwhile, US dollar fell to its lowest levels ever.

    I think BRICS bloc, ahead with Russia and China have succeed to break legs of America in very short time.
    Last edited by kety; 03-16-2013 at 08:39 AM.

  15. #44
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    BRICS Nations Plan New Bank to Bypass World Bank, IMF
    By Mike Cohen & Ilya Arkhipov -
    Mar 26, 2013 8:31 AM GMT+0100

    The biggest emerging markets
    are uniting to tackle under-development and currency volatility with
    plans to set up institutions that encroach on the roles of the World
    Bank and International Monetary Fund.


    The leaders of the so-called BRICS nations -- Brazil, Russia, India, China
    and South Africa -- are set to approve the establishment of a new
    development bank during an annual summit that starts today in the
    eastern South African city of Durban, officials from all five nations
    say. They will also discuss pooling foreign-currency reserves to ward
    off balance of payments or currency crises.

    “The deepest rationale for the BRICS is almost certainly the creation
    of new Bretton Woods-type institutions that are inclined toward the
    developing world,”
    Martyn Davies, chief executive officer of
    Johannesburg-based Frontier Advisory, which provides research on
    emerging markets, said in a phone interview. “There’s a shift in power
    from the traditional to the emerging world. There is a lot of
    geo-political concern about this shift in the western world.”

    The
    BRICS nations, which have combined foreign-currency reserves of $4.4
    trillion and account for 43 percent of the world’s population, are
    seeking greater sway in global finance to match their rising economic
    power. They have called for an overhaul of management of the World Bank
    and IMF, which were created in Bretton Woods, New Hampshire, in 1944,
    and oppose the practice of their respective presidents being drawn from
    the U.S. and Europe.

    Reform Needed

    “We
    need to change the way business is conducted in the international
    financial institutions,” South African International Relations Minister
    Maite Nkoana-Mashabane said in a March 15 speech in Johannesburg. “They
    need to be reformed.”

    The U.S. has failed to ratify a 2010
    agreement to give more sway to emerging markets at the IMF, while it
    secured Jim Yong Kim, an American, as head of the World Bank last year
    over candidates from Nigeria and Colombia.

    Finance ministers and
    central bank governors from the BRICS nations are meeting in Durban
    today to discuss the bank and currency fund, with leaders expected to
    arrive later today.

    Goldman Sachs Asset Management Chairman Jim
    O’Neill coined the BRIC term in 2001 to describe the four emerging
    powers he estimated would equal the U.S. in joint economic output by
    2020. Brazil, Russia, India and China held their first summit four years ago and invited South Africa to join their ranks in December 2010.

    Trade
    within the group surged to $282 billion last year from $27 billion in
    2002 and may reach $500 billion by 2015, according to data from Brazil’s
    government.

    http://www.bloomberg.com/news/2013-0...-bank-imf.html

    &

    China, Brazil sign trade, currency deal ahead of BRICS summit

    BRICS members
    China and Brazil agreed on Tuesday to trade in their own currencies the
    equivalent of up to $30 billion per year, moving to take almost half of
    their trade exchanges out of the U.S. dollar zone.


    The agreement, due to last
    three years and signed hours before the start of a BRICS summit in
    Durban, South Africa, marked a step by the two largest economies of the
    emerging powers group to make real changes to global trade flows long
    dominated by the United States and Europe.

    "Our
    interest is not to establish new relations with China, but to expand
    relations to be used in the case of turbulence in financial markets,"
    Brazilian Central Bank Governor Alexandre Tombini told reporters after
    the signing.

    Trade between the two
    countries totalled around $75 billion in 2012. Brazilian officials have
    said they hope to have the trade and currency deal operating in the
    second half of 2013.

    At the summit
    in Durban, the fifth held by the group since 2009, Brazil, Russia,
    India, China and South Africa are widely expected to endorse plans to
    create a joint foreign exchange reserves pool and an infrastructure
    bank. They are also due to discuss trade and investment relations with
    Africa.

    http://in.reuters.com/article/2013/0...92P08O20130326


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    France Announces Historic Currency Deal With China
    April 25, 2013

    The world will soon no longer need dollars to conduct global trade.


    China’s latest effort to bring on a post-dollar reserve-currency world took a big step forward April 12. Bank of France Governor Christian Noyer announced that France and China will set up a currency swap line to allow French companies to bypass the U.S. dollar for trade.

    The idea is to turn France into the major offshore Chinese currency trading hub—and to challenge London as the European center for access to Chinese capital.

    The announcement followed a similar but smaller move by the Bank of England earlier this year to set up a three-year yuan-sterling swap line with China.

    According to Reuters, France may soon become the center of focus for yuan trading—despite Britain’s reputation as a center of global finance. The total value of offshore yuan-denominated bonds issued by French corporations is nearly twice the value of bonds issued by their British counterparts.

    The China Daily reports that 50 percent of French companies have used yuan-denominated products and services.

    “France’s historic relationship with Africa, and its favorable geographical location, also makes Paris a natural hub for [yuan] trading in the Sino-African business flows that are traded through Paris,” says Arnaud de Bresson, chief executive of Paris Europlace, a marketing group that promotes France’s financial industry.

    As important as it is for France to increase trade with China, especially as Europe struggles through its debt crisis, this deal may prove to be even more important to China as it wages its currency campaign to remove the dollar as the world’s reserve currency.

    Over the past two years, China has announced a string of yuan internationalization efforts that are systematically chipping away at the dollar’s importance to global trade. Financial blog Zero Hedge reports: “One more domino in the dollar reserve supremacy regime falls. [T]he announcement two weeks ago that ‘Australia and China Will Enable Direct Currency Convertibility’ … was the culmination of two years of yuan internationalization efforts as summarized by the following”:

    “World’s Second- (China) and Third-Largest (Japan) Economies to Bypass Dollar, Engage in Direct Currency Trade”

    “China, Russia Drop Dollar in Bilateral Trade”

    “China and Iran to Bypass Dollar, Plan Oil Barter System”

    “India and Japan Sign New $15bn Currency Swap Agreement”

    “Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says”

    “India Joins Asian Dollar Exclusion Zone, Will Transact With Iran in Rupees”

    “The USD Trap Is Closing: Dollar Exclusion Zone Crosses the Pacific as Brazil Signs China Currency Swap”

    The prospect of 317 million members of the eurozone eventually conducting trade in yuans instead of dollars for bilateral trade will be a massive boost to China. In turn, France has positioned itself as China’s doorway to Europe—and the largest economic market in the world.

    France may also unintentionally open the door for the dollar’s destruction.

    What will happen to the dollar when, over time, all those European countries realize dollars are no longer needed to conduct what amounts to around 30 percent of global trade? The need to keep as many U.S. dollars in reserve will evaporate.

    The simple economic laws of supply and demand will then kick in. Those unneeded dollars will come flooding back on the market. Dollars not sold will be spent snapping up American corporations and income-producing assets. And the dollar’s value will tank.

    More importantly, America’s ability to print dollars out of thin air to finance unsustainable spending and other “stimulus measures” will be drastically curtailed because a huge chunk of the world will no longer be locked into using and storing dollars.

    America is “witnessing and living through some of the greatest and momentous changes in world economic history,” wrote economic analyst Richard Russell. “It will be, historically, tantamount to those of us who fought and lived through World War ii.”


    Russell is right. A massive shift in the global economic order is on the way. New alliances are being formed, and America is about to be blindsided when many of its economic allies abandon it.

    For information on why China and Europe are destined to join together in an anti-dollar alliance, read “The Great Mart.” ▪

    http://www.thetrumpet.com/article/10...eal-with-china



    OK, I think this is really over :/ End of so called age of America has really come to an end.

    I don't have nothing against China, don't get me wrong, it's just I prefer more US raither than China.

  17. #46
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    R.I.P U.S. DOLLAR


    1. Germany ditching U.S. dollar

    Yuan Offshore Trade Race Picks Up With Frankfurt Bid: Currencies

    The race is on to corner the overseas trade in China’s yuan, with an organization that represents Frankfurt’s financial industry predicting the European Central Bank will get a swap deal valued at four times that obtained last week by the U.K.

    The ECB, based in the German finance capital, may obtain a swap agreement with the People’s Bank of China valued as much as 800 billion yuan ($130 billion), according to lobby group Frankfurt Main Finance. A deal would give euro-area central banks access to yuan funds to backstop companies doing business in the world’s second-largest economy, and would dwarf the 200 billion-yuan agreement signed June 24 by the Bank of England.

    Policy makers and bankers are meeting with companies from carmaker Volkswagen AG (VOW) to industrial-gas producer Messer Group GmbH in Frankfurt today to discuss establishing the city as an offshore yuan-trading center. It’s the latest chapter in China’s push for greater use of its currency outside the mainland.

    “This has been an issue for our clients for years,” Dirk Schmitz, co-head of the German investment-banking arm of Deutsche Bank AG, the biggest currency trader, said in a phone interview. “German companies have a good commercial relationship with China. Companies often come to us to ask for hedging.”
    Yuan Loans

    A swap agreement would see the ECB put up euros in exchange for the Chinese currency, which it could then lend to companies.

    An ECB official, who asked not to be identified, declined to comment on the talks, saying this was in line with the central bank’s policy.

    Germany is China’s biggest trading partner in Europe. By 2015, a third of the Asian country’s cross-border business will be settled in yuan, making the currency the third most-traded after the U.S. dollar and euro, according to HSBC Holdings Plc, Britain’s biggest lender, which has its origins in 19th-century Hong Kong and China.

    The three-year swap agreement that BOE Governor Mervyn King signed with his Chinese counterpart Zhou Xiaochuan last month is half the size of Hong Kong’s 400 billion-yuan deal. The accords provide companies with a safety net that aims to give them more confidence in doing business with their Chinese partners.
    GEA Benefit

    GEA Group AG (G1A), the Dusseldorf-based supplier of technology to food and energy companies in countries including China, is among Germany’s small- and medium-sized companies that stand to gain from Frankfurt’s push for a yuan-swap agreement.

    “The free convertibility would speed up business and make transactions more secure,” Chief Financial Officer Helmut Schmale said in an interview at the company’s plant in Oelde, Germany, on June 27. “China has always been a growth market for us and will remain such for the foreseeable future. In a few years, the yuan will become the third global currency, with the dollar and euro.”

    Sales from GEA’s China business grew to 556 million euros ($720 million) last year, or 10 percent of its total, according to Schmale. Its employees in the country increased 15 percent to 2,431 in December compared with a year earlier, he said.

    China’s yuan climbed to a record 6.1210 per dollar on May 27 and closed at 6.1308 in Hong Kong today. The 12-month non-deliverable forwards fell 0.1 percent to 6.302 per dollar at 2:51 p.m. in London.

    The yuan is the only major currency apart from Israel’s shekel to strengthen against its U.S. counterpart this year, gaining 1.6 percent.
    Overseas Trade

    Frankfurt is basing its push for the offshore yuan business on Germany’s close ties with China, the nation’s third-biggest trading partner. The two countries imported and exported goods and services worth 144 billion euros between them last year, according to the Federal Statistics Office in Wiesbaden, Germany.

    “The high level of interaction between China’s and Germany’s real economies highlights the necessity for a more active renminbi trade, perhaps even using Germany as a hub,” Joachim Nagel, a Bundesbank board member, said in a speech at today’s conference. “Given China’s growing economic importance, the internationalization of the renminbi seems long overdue.”

    Transactions in yuan jumped to 8.2 percent of trade deals between Germany and China in May, the biggest month-on-month increase among 20 nations using the Chinese currency, according to the Society for Worldwide Interbank Financial Telecommunication. The Belgium-based group, known as Swift, provides messaging services to banks.

    http://www.bloomberg.com/news/2013-0...urrencies.html

    2. Canada ditching U.S. Dollar

    Toronto Reviews Bid to Become Yuan Currency Trading Hub

    Canada’s banks are considering a plan to make Toronto the first North American trading hub for China’s yuan, joining a global race for a share of trading in the currency of the world’s second-largest economy.

    Some of Canada’s largest banks, insurance companies and pension funds met with government representatives and the Bank of Canada in Toronto on June 21 to discuss establishing a yuan trading hub, according to the Toronto Financial Services Alliance, an industry group that set up the meeting. Representatives of Chinese banks also attended the meeting, the group said, declining to name them.

    “There’s been expressions of interest from some companies,” said Janet Ecker, president of the finance group, who attended the meeting. “We’ve seen what’s happened in London and Singapore and Hong Kong.”

    The moves to set up a trading hub in Canada come as an organization representing Frankfurt’s financial industry predicts the European Central Bank is nearing a deal with China that will help the German financial center become a European yuan trading hub.

    The Bank of England signed a similar but smaller agreement last month, joining other recent additions like Australia, Turkey, Brazil and South Korea as China pushes for greater use of its currency outside the mainland. To have a trading hub, a country’s central bank must have an agreement with China’s central bank to swap its currency for yuan.

    http://www.bloomberg.com/news/2013-0...ading-hub.html

    3. Switzerland ditching U.S. dollar

    Switzerland Will Join Race to Be Trading Hub for China’s Yuan

    Switzerland plans to bid to become an offshore yuan trading center in Europe, competing with Frankfurt and London to corner trade in the Chinese currency.

    “It is in Swiss interest to have a renminbi hub in the center of Europe,” Economy Minister Johann Schneider-Ammann said in Beijing today after signing a free trade agreement with Chinese Commerce Minister Gao Hucheng. While no official talks have taken place, Schneider-Ammann said he hopes the idea will become “more serious” in the coming weeks or months.

    Leaders of the world’s second-largest economy are promoting greater use of the yuan in international trade and finance to decrease the country’s dependence on the U.S. dollar and move toward making the currency convertible for investment purposes. Zurich is vying with London, Paris and Frankfurt for the top spot in Europe, while Canadian banks are considering a plan to make Toronto the first North American trading hub.

    “The Swiss side, the Swiss financial system, in particular the Swiss National Bank, we are interested in getting the chance to negotiate with the Chinese about a renminbi hub in the center of Europe, in Switzerland,” Schneider-Ammann said, using another term for the yuan.

    London, the center of the world’s $4 trillion-a-day market for foreign-exchange trading, claims to have the edge in Europe after the Bank of England signed a three-year currency swap line with the People’s Bank of China last month, becoming the first among European central banks to establish such a facility with the Asian nation.

    http://www.bloomberg.com/news/2013-0...na-s-yuan.html

    4. UK ditched U.S. dollar

    The Bank of England and its Chinese counterpart have signed a deal likely to boost trade between the UK and China in the yuan.

    The Bank and the People's Bank of China have signed a three-year currency swap arrangement worth 200bn yuan (£21bn, $33bn), the UK central bank confirmed.

    The UK is looking to become a centre for the Chinese currency, also known as the renminbi.

    British banks hold 35bn yuan worth of deposits in the Chinese currency.

    Currency-swap agreements allow central banks to swap currencies and can be used by firms to settle trade in local currencies rather than in US dollars, as happens now, since China's currency is not fully convertible to other currencies.

    http://www.bbc.co.uk/news/business-23020718

    Practically the whole world has abandoned the American system for international trade. This will be a far bigger shock for the U.S. economy than Great Depression.
    Last edited by kety; 07-06-2013 at 09:53 AM.

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