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Basically the dollar is stil the place where people are puting their wealth other than gold. Russia is doing nothig that they don;t always do and their srude wealth has reallt =y suufer which is much the basis for teir economy. China bascailly has made a habit of keepig their curerency devalued for economic world trade resons. Looking at the investment that china has in US tresureies its just what mnay are doing inthsi financial crisis. The chijnese don;t really liike the US creency beinbg deavlue in realtion tot heir in this global economy because it threates their exports.They don't have a consumer based economy demomestically yet altho its growing.
US Dollar - China & Russia No Longer Trading With The Dollar
Is this a result of the world starting to lose faith in the almighty US Dollar, because of our out of control deficit spending and continued monetizing the US debt?
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.
"About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.
The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.
Is this a result of the world starting to lose faith in the almighty US Dollar, because of our out of control deficit spending and continued monetizing the US debt?
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.
"About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.
The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.
Is this a result of the world starting to lose faith in the almighty US Dollar, because of our out of control deficit spending and continued monetizing the US debt?
No, it's just a natural course of events. Or maybe it's karma. The US and UK conspired for decades to bar the Russian Ruble (and all other East-Bloc currencies like the Romanian Leu) from being traded on the world market.
That left the Soviets (and other East-Bloc countries) in a very bad position economically. Since their currencies were barred, they were forced to trade their currencies for US Dollars (and take a loss on the transaction) and then use the US Dollars to purchase commodities on the world market.
And of course, some people said communism doesn't work. Well, let's bar the US Dollar and British Pound and force them to purchase Euros to conduct world trade and we'll see how long democracy lasts in the US and UK.
Russia opened its own market in the late 1990s. The Ruble has gained respect and value, and the Russians dumped all of their US Dollars about 6 or 7 years ago. They hold gold and Euros as a reserve currency.
Many western countries, Sweden, Denmark, the Netherlands, Germany, France and even MENA countries like Saudi Arabia have either dumped their US Dollar reserves are have been reducing the amount US Dollars and opting for Euros and/or gold instead.
None of that has to do with faith in the US Dollar, rather it has to do with very bad US foreign policy for the last 60 years plus the fact that trade with the US always has 9,238 strings attached, and countries are just tired of it. It's much easier to trade in Euros or Yuan or Rubles and not play the stupid game.
Compare the trade between China and Russia versus the total global trade done in U.S. Dollars and get back with me. This is pretty much a non-starter.
Also if for any reason the Russian Ruble plunges like it did around 2000 the Chinese will find themselves royally f**ked.
By the way the U.S. Dollar has STRENGTHENED against damn near every major currency in the last 24 hours.
Thanks for sharing.
The two countries used to use the US Dollar for trade between themselves, so you think its just a coincidence that this deal was made, shortly after the announcement of QE2, and the uproar that brought from the world?
Chinese Yuan
Russian Ruble
Euro
Seems the US Dollar is having problem with the Euro and Yuan.
With the state of the European countries, even trading in the Euro is at question now.
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US Dollar - China & Russia No Longer Trading With The Dollar
