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Will the Trickle Out of the U.S. Dollar Now Become a Torrent?
China and Russia To Stop Using the U.S. Dollar For Mutual Trade! Who’s Next?
Last week another brick was taken out of America’s dollar fundamentals. China and Russia have announced that they intend to stop using the U.S. dollar and begin to pay for trade between their two countries in renminbi and rubles, respectively, from now on. Watch out America – with the coming demise of the U.S. dollar your free ride is over! Words: 614
So says Marek Kuchta (www.goldinmind.com) in his article* which Lorimer Wilson, editor of www.munKNEE.com, has reformatted and edited below for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.) Marek goes on to say:
The mutual announcement by China and Russia on the use of the dollar couldn’t be less pungent. It was made by the top officials of both countries, Premier Wen Jiabao and Premier Putin, respectively, not just their finance ministers or some lower ranked politicians – and it took place on the eve of America’s Thanksgiving Day – which will now be a very special day for America in more ways than one!
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What are the implications for the dollar and the stock markets?
In the short-run probably not much as short-term traders and speculators rely heavily on Bloomberg, CNBC et al and this dollar event won’t make their top headlines or get extensive TV coverage. In addition, the further weakening of the U.S. dollar won’t shake the markets as 90% of market participants are in denial as to the realities regarding the future of the dollar – and their country. Indeed, at the time of this writing, it has been about 8 hours since this dollar event took place yet there is no mention of it on any of the top financial media outlets, despite this being probably among the top 3 news events for the dollar this year in terms of importance. All you hear about are the great Thanksgiving sales numbers, the “soaring stock market” and the PIIGS.
All is good in America – but not for long!
When questioned about it, U.S. officials will downplay the importance of the settlement but the world shakers are watching closely. Earlier this year, Brazil and China announced a similar fate for the dollar: they want to trade in real and renmimbi instead of the U.S. dollar. This was labeled ‘idle talk’ by some commentators. Well, here’s the action – and it won’t be the last one. Indeed…
Will the OPEC countries of the Middle East be next to abandon the U.S. dollar?
Editor’s Note:
- The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
- Permission to reprint in whole or in part is gladly granted, provided full credit is given as per paragraph 2 above.
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Short URL: http://www.munknee.com/?p=16394
Posted by Editor on Nov 28 2010, With 0 Reads, Filed under Economy, U.S. Dollar. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.
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Excellent piece by an excellent writer. Young brilliant with amazing insights. Keep an eye out for Mr. Kuchta.