China-Russia Yuan-Ruble Trade Will Reshape Global Financial System

Trade settlement in local currencies between China and Russia, according to “official” statistics, account for 7% of their bilateral trade.  But the dollar amount has grown 700% in the last year.

Growing cooperation between Russia and China has become one of the hottest topics in the global economy. It is signaling the emergence of a strong alliance of one the world’s richest and strongest economies, which is expected to reshape the existing western-dominated economic model ( link)

This part of an ongoing, systematic plan to remove the dollar as the global reserve currency.   China, as we all know, has been methodically establishing currency swap facilities with most of its major trading partners which enable a limited amount of bilateral trade settlement in local currencies.  These deals have been signed with many western countries, including the UK, France and Switzerland.

“There is a reason to believe that this trend will continue in the coming years and the role of the yuan will increase rapidly not only in international trade, but as the currency of international reserves of the central banks,” he said [Aleksandr Prosviryakov, PricewaterhouseCoopers LLC, Russia].

The writing is on the wall for the dollar.  It’s only a matter of time before the plug is pulled.  It has been my view that China has been working toward de-dollarizing the global financial system in an attempt to avoid a massive global economic shock and the ensuing chaos, which would likely precede a global military conflict.

Certainly the massive transfer of physical gold from the west to east has been part of the process in ending the petro-dollar.

I hope China’s plan to precipitate a peaceful transition from a dollar reserve currency system to a new currency system is successful.  I find it hard to believe that the U.S. will relinquish its power without a big fight…

10 thoughts on “China-Russia Yuan-Ruble Trade Will Reshape Global Financial System

  1. Yeah, because China is such a peace loving democracy. That’s why they prop up mass murderer North Korea and lock people away for having the wrong opinion.


    1. American’s like to think that they are somehow entitled to the biggest and best of everything. They have been trained since childhood, to believe that they are the wealthiest and most prosperous nation on earth and it will always be that way.

      Ultimately, this daydream will end very badly and in it’s ending, they will pay a great price for their greed, hubris, foolhardiness and ignorance. People who live in glass houses, can ill afford to throw stones.

  2. I like what Jeff said in your previous video – the Chinese proceed quietly and do not make big pronouncements. The USA on the other hand spews all kinds of grand marketing statements to drive public opinion. Our bravado is breathtaking. The Chinese won’t announce the end of dollar hegemony – markets reaction will be the tell.

    That’s why we’re not going to get any advance warning from anyone. No one wants to be pointed to as the catalyst for change, and hence receive the blame. The Chinese and the Russians are playing the long game.

  3. The lunatics behind American foreign policy are itching to flex their muscles so if
    they have their way war will be outcome regardless of what the future holds.

  4. Fred, you better lube up, bend over and repeat in Mandarin ” Thank you sir, may I have another!”, because you buddies over @ DHS don’t give a shit about your rights or the Constitution!

  5. Dave-
    would like to get your take on this to see if it coincides with mine…i see this a more rats jumping the OTC ship before it implodes…
    ” Nomura Holdings Inc. will no longer act as a middleman to allow clients to guarantee their swap trades with a clearinghouse, the latest bank to exit the business as new rules increase risks and costs in the $630 trillion market. “Due to the evolving and uncertain regulatory and market environment,” Nomura will no longer offer its clients the option of clearing swap trades in the U.S. and Europe, Rob Davies, a spokesman for the Tokyo-based firm, said in an e-mailed statement Tuesday. “Our focus is to continue growing our execution business” in both private swaps and listed derivatives around the world, he said.”

    1. Yep. Thanks for the link. I may post on it tomorrow. Looks like banks with smaller exposure are dropping out. There’s a big push by Blackrock to get Congress to pass a law authorizing a bailout of the DTCC derivatives clearing system. If that happens, all the banks will drop and push everything to DTCC and taxpayers will be on the hook.

  6. Wow. You enable mass murder, harvest prisoners organs, censor and micromanage information and the Internet and DHS is the problem? Yeah, right.
    I’ve traveled extensively in China. 70% of the farmland is laced irretrievably with pollution. You can’t see the sky because of smog. The place is disgusting. It’s a garbage dump. I don’t trust any food produced there. Look at the drywall which is causing massive recalls that is oozing benzine. Nice job China.
    As for China’s financials, the days of mercantilism are done. Manufacturing is coming home. Why? Robots are cheaper than 3rd world pollution ghettos. Read Stockman. China is the biggest ponzu scheme ever produced. No innovation and massive debt managed by a crony communist wannabe regime.

    1. I too live in Asia. Thailand where I live is in the most crazy property bubble you have ever seen. My condo, right on the beach, is six years old. 80% unoccupied.
      And mostly Russian who own the other 20%.
      They are in deep trouble.

      I’ve seen the same deal in Cambodia, Vietnam and China.

      I think we all are screwed.

  7. Yep, They will screw each other as fast as us. Ponzi Asia.

    We call Thailand……….lieland because all they do is lie!
    But the Chinese are worse by a country mile.

    The Thai’s hate them. They are rude and crude.

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