China Signs Non-Dollar Settlement Deal With Russia's Largest Bank

Tyler Durden's picture

Slowly - but surely - the USD's hegemony is being chipped away whether by foreign policy faux pas, crossed red-lines, or economic fragility. However, on Day 1 of Vladimir Putin's trip to China it is clear that the two nations are as close as ever. VTB - among Russia's largest banks - has signed a deal with Bank of China to pay each other in domestic currencies, bypassing the need for US Dollars for "investment banking, inter-bank lending, trade finance and capital-markets transactions." Kirill Dmitriyev the head of Russia’s Direct Investment Fund notes, "together it’ll be possible to discuss investment in various projects much more efficiently and clearly," as Russia's pivot to Asia continues to gather steam.


As RT reports, Day 1 for Putin is going well...

VTB, Russia’s second biggest lender, has signed a deal with Bank of China, which includes an agreement to pay each other in domestic currencies.


“Under the agreement, the banks plan to develop their partnership in a number of areas, including cooperation on ruble and renminbi settlements, investment banking, inter-bank lending, trade finance and capital-markets transactions,” says the official VTB statement.


The deal underlines VTB Group’s growing interest in Asian markets and will help grow trade between Russia and China that are already close trading partners, said VTB Bank Management Board Vasily Titov.

But it's not just the banking relationships...

In the first day of a two-day trip to China Russia’s President Vladimir Putin said the two countries will be increasing their bilateral trade to reach a new level.


Our countries have done a huge job to reach a new historic landmark…. China has firmly settled in a position of our key trade partner,” Putin said.


Putin also said that trade turnover between Russia and China grew almost 2 percent during 2013 to reach about $90 billion.


“If we sustain this pace the level of bilateral trade of $100 billion will be reached by 2015 and we’ll confidently move on,” Putin said.


Increasing investment cooperation is crucial, Putin added.




“Together it’ll be possible to discuss investment in various projects much more efficiently and clearly,” as Interfax quotes Kirill Dmitriyev the head of Russia’s Direct Investment Fund.

Nothing lasts forever... remember...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
lolmao500's picture

Market talk out of China : gas deal negociations are not going well...

LawsofPhysics's picture

How so? do they plan on flooding Russia, with Chinese?

Who runs bartertown?

China may still have leverage with the U.S.S.A. because of wage arbritage, but not so much with Russia.

Arius's picture

Memo to the Doc:

make sure to slam the thermometer

DO NOT WORRY about the patient

He will be okay, eventually we all will be dead!

SoberOne's picture

Again, intentional. Anyone who doesn't see it can't be helped. Sanctions against russia for them "invading" a non nato, non treatise country. Intentional kill of the dollar.

Latina Lover's picture

bye bye, Mrs American Pie....

Vampyroteuthis infernalis's picture

This brings up a simple question, will they settle in Rubles or Yuan? If it is in Yuan which is pegged to the USD the USD will not feel a thing. If it is in Rubles, that would be significant as a move away from the dollar.

Badabing's picture

goolosh for rahmen we're fucked

SoberOne's picture

Bye bye Ms. American pie, gave my recall back to shevy- tax payers pockets are dry. Them good ol boys drinking blood and rye, singing this will be the day that I die!

ParkAveFlasher's picture

DATE: May xx, 2014
TO: All Tenants
RE: Single Tenant Evacuation Drill
FROM: Building Management
Please be advised that on Thursday May 22, 2014 at approximately 1:30pm, FDIC, a tenant in the building, will be conducting a company emergency evacuation drill whereby their entire company will be evacuating the building onto 33rd street at that time.
If you have any questions or concerns, please contact xxx, Assistant Director of Operations at or x, Manager of Tenant Services at
We thank you in advance for your cooperation.

Four chan's picture

two red back stabbers ink deal. we'll se how this turns out.

markmotive's picture

China is already f@$ked.

Guess what happens when we roll off QE?

Every other time QE ended, a major crisis erupted

Oh regional Indian's picture

Is it going to be the YuRou? Or the RoYu?

What about the poor Rupee?



The Dayyyyyyy, the Dorrar died....

Eeyores Enigma's picture

It does not matter what currency is used for any deal anywhere because everything is priced in dollars. Everyone will simply manuver their money in order to hold the currency that allows them to consistantly do the deal at the lowest price which has been and will be the dollar until someone prys the WORLD RESERVE CURRENCY from our cold dead hands.

Good luck with that. (hint: Who has the largest military on the planet X 10?)

dontgoforit's picture

You mean, who's got the bigger banks and the most cut-throat?  However, I agree with your point that the comparative value of Yuan and Ruples will be handled via a quick glance to those currencies daily value guessed it:  the US $.

Zerozen's picture

Why glance at the USD, why not at the EUR or the JPY? Since all these currencies float and any arbitrages are near-instantly arbitraged away by computers, you can use anything you want to price the comparative value of a ruble against a yuan, right? 

Or, if trade in real goods between the two countries is big and meaningful, they'll be able to establish relative values for their currencies directly against each other. Isn't that the purpose of these huge Russo-Chinese deals?

ebear's picture

Familiar territory for both nations.

Currency is just an accounting device.  What matters is bi-lateral trade.

walküre's picture

You really are in the thick of it. Reporting to us live from the pits of hell where the beasts roam free. Hope for your sake you're armed to the teeth.

ParkAveFlasher's picture

The only way out, is deeper in. Time to schedule a late lunch.  I'm only armed with a cup of coffee and a calculator. 

Anasteus's picture

One will not be capable of understanding in the future why on earth the whole planet got tricked and manipulated into accepting this artificially generated green paper, especially, after the failure of the Bretton Woods agreement. The herd-like greenback acceptance worldwide is probably the most significant sign of global psychotic pandemic. Something, I hope, will serve as a memento not to repeat this mistake anytime in the future.

Hopefully, our minds have started unspelling as a prerequisite of the mental disease remedy.

Monty Burns's picture

Let's hope the $ crashes.  Nothing else will bring about the Great Reset, and the happy sound of the guillotine blads slamming down on the necks of psychopaths.

free_lunch's picture

I have been fearing the collapse 5 years now, with all the predictions on the internet again and again, and the only thing that happened so far is that I lost sleep, while missing the profits of the market due to this fear. While friends have tripled their money.. So I recently decided it is better to stop worrying about it, and try focus on living again.. Call it collapse fatige.. Now I only have to try to limit my ZH visits, to avoid re-igniting fear.. wich is harder then expected, because of the addictive funny sarcasm over here..


ebear's picture

Collapse is an ongoing process most often revealed in hindsight.  While you're waiting for the signs, it's happening all around you.  So is the rebuilding, although that's even harder to perceive.

Nage42's picture

First step is to establish the paperwork agreement.

Second step is to dry-run the engine with the existing peg for RMB.

Third step is to float the Yuan (fractional gold-backed) and then peg a fixed FX RMBRUB.

Fouth step is to cut the moarings from RMBUSD and float off into the ocean of the future while the dockings of SWIFT/USD sinks


I dub the TM for the future Ruble/Yuan morph:

RUB + Remimbei = Rubbei (pronounced "Rubby")




Four chan's picture

sounds right but does it have he approval of the rothschilds? 

DaddyO's picture

Yep, they're hedging their bets...


silverserfer's picture

I will go with european masters over asian ones. if it is a reality I will die underneath. Asian masters are quite inhumaine, Fuck them both but yuan reserve currency carries social burden that chinese are incapable of comprehending. Moral defficencies rampant. 

RaceToTheBottom's picture

Very interesting.

Sorry for obvious questions, but why would China lock themselves (even fractionally) to gold.  They printed 3X the US in funny money last year.  Tying themselves to Gold would be "Pulling a Nixon" and let others buy their gold at reduced prices.  No?


Also why would Chinese peg to anything?  Especially the Ruble?  I can see manage a range but Peg?

Sorry if you have covered this earlier....

CPL's picture

The Chinese and Russians have gold, silver, lumber, food and oil.  Real PM's. That's what matters.

CrazyCooter's picture

Just for the record:

Print this out and stick it on the fridge. When the shit hits the fan, this is the list of who (importers) goes under the bus (exporters).



Zerozen's picture

Somewhat OT: I read the first link. The author had me following along until towards the end where he started pimping GMO crops as a technological innovation that safely increases yields and nutritional profiles of crops. Not only is that not true, it's 180 degrees the opposite of the truth. There's a reason this shit is banned in more countries than it is grown in.

I also got a chuckle out of the author's whitewashing of the question as to why Africa underperforms - they just need better institutions, ya see! Institutions are not some software upgrade that you install into your country's proverbial computer and then you're good to go. People build and maintain stable institutions; they evolve out of a people's culture and development over the course of their history.

Sean7k's picture

If that is so, then why isn't Africa running the world? Why is Saudi Arabia a regional power? Can we quit with the simplistic bartertown calls. Finished goods are just as important. Central banking is more important as well. Now, will someone please elimnate the dollar as a reserve currency so we can stop producing debt to fund the world?

China wants the reserve- means one thing and one thing only- the Elites feel there is more wealth to transfer in China than the US.

john39's picture

>>why isn't africa

pretty simple really.  tptb have waged a war of terror and destruction in Africa for hundreds of years to ensure that Africans can not stand up and defend themselves.   But don't be jealous Americans, by the looks of things, you are next on the hit list of regions to go under the full jackboot treatment.

Oh regional Indian's picture

Unpopular view john and totally predictable based on history and current signals.

But here sits the Choir.

There, far far away in Truman land is the mass.

Zerozen's picture

Lol what? TPTB didn't even make it into Africa in any meaningful way until well into the 19th century and were gone by the 1960s.

Africa is not a leader in anything (and never has been) because that's what the people that live there are like. Just a century ago half the continent was living at an iron-age level of advancement. It is what it is.

Why is it that for Africa's failures we always have the colonialism excuse, but on the flipside there are plenty of other nations that suffered setbacks (atrocities, invasions, depopulation, exploitation etc.) for longer than colonialism was in Africa and yet these nations have survived and are far more successful than any African country?

silverserfer's picture

in a world of cultural achievers somene has to come in last. Thats just the way it is. History is manifested into physical representaion and the evidence is around for all to see. 

Anusocracy's picture

Perhaps the elites are just running to the front of the parade to be in the right position to benefit.

Some changes are nearly impossible to resist - one of which is technological - and the last I saw, the Chinese were graduating 600,000 scientists and engineers each year, and the US was graduating 70,000.

Sean7k's picture

Most of whom are unemployed and angry, commony referred to as ants or neets in other countries. See, for more realistic numbers.

Anusocracy's picture

Thanks for the link even though it is NPR.

Monty Burns's picture

"why then isn't Africa running the world?"


Answer: Because Africans are incapable of running the proverbial piss-up in a brewery. This is a cruel fact but for sure it is a fact.

Steaming_Wookie_Doo's picture

To CPB's point:

The Chinese and Russians have gold, silver, lumber, food and oil.  Real PM's. That's what matters.


The reason Africa isn't running the world comes down to social stability, available infrastructure, education, and an ability to cohesively defend themselves from imperialists. Please recall that Qaddafi was killed only when he began to preach African unity and a gold-backed dinar. Africa could be a complete paradise if there weren't forces trying to keep it crippled at every turn.

As for the Saudis, they have lots of influence (for now) but squander it on so many useless endeavors. They should be sinking money into massive de-salinization plants and re-engineering the deserts back to green. One day the oil money will go below a certain point and their entire way of life will implode. 

Drifter's picture

"If it is in Yuan which is pegged to the USD the USD will not feel a thing."


USD's value is in everybody using it for trade.  Not just oil.  Everything else too. 

These large trade agreements outside USD reduce demand for USD on a net global basis. 

It doesn't matter what other currency is used.  Not using USD is the issue.

USD's eventual collapse will not come from printing.  It will come from abandonment.  Other nations stop using it, their banks dump whatever dollars they have.  As more nations dump dollars Forex becomes flooded with dollars and the price drops,  Just like anything else in over-supply.

To keep USD's value up Fed would have to start selling (worthless) securites on their balance sheet back to banks, along with making the government buy treasuries back, and take those dollars out of existence, thereby shrinking the pool of dollars available.

But no banks want those (worthless) securities back.  And the government doesn't have any money to buy treasuries back.

Arius's picture

Question to Mr. Armstrong, once he is done bagging Christians :


Why is gold pegged at $1300 ?  What do you think of MS, GS prediction of a 1300 top ?


anybody else please feel free to add your thoughts ...

Sean7k's picture

Bernanke said long ago he was willing to see gold at 1300 to withdraw some liquidity from the system. When we buy pm's we are helping withdraw liquidity by spending fiat and placing the pm in savings (safe).As long as people trust in debt notes, the price will be determined by the Elites, not the value of currency. 

By consuming articles without real value, we use currency that would normally depreciate. Consumption is the banker's best defense as they continue to use inflation to transfer wealth. Yes, gold and silver could be an insurance policy against fractional reserve banking going belly up, but it requires it be used as money.

Congress members knew this in the early 1800's as they argued over paper money and silver/gold ratios. Paper was more convenient, therefore, if you want people to protect their savings and assets, the system must make specie easy to use. The Constitution clearly identifies silver and gold as money. It is legal tender. Use it or lose it.

ParkAveFlasher's picture

I don't understand this comment.  You are saying that by exchanging fiat for gold, and by hoarding gold, you are engaging in a naturally deflationary act.  I would disagree 100% to that generality.  You do not regard what the other side of the exchange - the gold seller, fiat buyer - will do with the fiat he now holds.  His acts may be extremely inflationary.  He might set down payments on a group of properties close together so as to induce a localized property boom, indeed an inflationary pump.  There is no single act with a single effect in all God's creation.  Cash is a mutable tool.  Gold is also a mutable tool.  Brushes do not create art and guns do not kill people.  In fact I would go further to say that any transaction whatsoever is naturally inflationary in a fiat system used by a growing population.

Sean7k's picture

Because, by tracking this expenditure, the FED can withdraw liquidity from the system, safe in the knowledge the money will not be needed.  Just as banks depend on people to leave savings in a bank and thus expand the money supply. 

Further, if you are growing the money supply, you need to grow prices to absorb the currency or deflation occurs. Thus the stock market goes up, food goes up, pm's go up. If you ever stop the carousel, that is when the problems begin. If people start USING pms, then currency becomes too abundant. (even stock prices have a limit). 

disabledvet's picture

"Safe in the knowledge that there is no fiat left" is more like it.

I did see an Alfa Romeo today it's hard to argue the world has ended quite yet.

"A" world might have ended though. "One new world deserves another." Move along...