Moscow And Beijing Join Forces To Bypass US Dollar In Global Markets, Shift To Gold Trade

Tyler Durden's picture

The Russian central bank opened its first overseas office in Beijing on March 14, marking a step forward in forging a Beijing-Moscow alliance to bypass the US dollar in the global monetary system, and to phase-in a gold-backed standard of trade.

According to the South China Morning Post the new office was part of agreements made between the two neighbours "to seek stronger economic ties" since the West brought in sanctions against Russia over the Ukraine crisis and the oil-price slump hit the Russian economy.

According to Dmitry Skobelkin, the deputy governor of the Central Bank of Russia, the opening of a Beijing representative office by the Central Bank of Russia was a “very timely” move to aid specific cooperation, including bond issuance, anti-money laundering and anti-terrorism measures between China and Russia.

The new central bank office was opened at a time when Russia is preparing to issue its first federal loan bonds denominated in Chinese yuan. Officials from China’s central bank and financial regulatory commissions attended the ceremony at the Russian embassy in Beijing, which was set up in October 1959 in the heyday of Sino-Soviet relations. Financial regulators from the two countries agreed last May to issue home currency-denominated bonds in each other’s markets, a move that was widely viewed as intended to eventually test the global reserve status of the US dollar.

Speaking on future ties with Russia, Chinese Premier Li Keqiang said in mid-March that Sino-Russian trade ties were affected by falling oil prices, but he added that he saw great potential in cooperation. Vladimir Shapovalov, a senior official at the Russian central bank, said the two central banks were drafting a memorandum of understanding to solve technical issues around China’s gold imports from Russia, and that details would be released soon.

If Russia - the world's fourth largest gold producer after China, Japan and the US - is indeed set to become a major supplier of gold to China, the probability of a scenario hinted by many over the years, namely that Beijing is preparing to eventually unroll a gold-backed currency, increases by orders of magnitude.

* * *

Meanwhile, as the Russian central bank was getting closer to China, China was responding in kind with the establishment of a clearing bank in Moscow for handling transactions in Chinese yuan. The Industrial and Commercial Bank of China (ICBC) officially started operating as a Chinese renminbi clearing bank in Russia on Wednesday this past Wednesday. 

"The financial regulatory authorities of China and Russia have signed a series of major agreements, which marks a new level of financial cooperation," Dmitry Skobelkin, the abovementioned deputy head of the Russian Central Bank, said.

"The launching of renminbi clearing services in Russia will further expand local settlement business and promote financial cooperation between the two countries," he added according to.

Irina Rogova, a Russian financial analyst told the Russian magazine Expert that the clearing center could become a large financial hub for countries in the Eurasian Economic Union.

* * *

Bypassing the US dollar appears to be paying off: according to the Chinese State Administration of Taxation, trade turnover between China and Russia increased by 34% in January, in annual terms. Bilateral trade in January 2017 amounted to $6.55 billion. China’s exports to Russia grew 29.5% reaching $3.41 billion, while imports from Russia increased by 39.3%, to $3.14 billion. Just as many suspected, with Russian sanctions forcing Moscow to find other trading partners, chief among which China, this is precisely what has happened.

The creation of the clearing center enables the two countries to further increase bilateral trade and investment while decreasing their dependence on the US dollar. It will create a pool of yuan liquidity in Russia that enables transactions for trade and financial operations to run smoothly.

In expanding the use of national currencies for transactions, it could also potentially reduce the volatility of yuan and ruble exchange rates. The clearing center is one of a range of measures the People's Bank of China and the Russian Central Bank have been looking at to deepen their co-operation, Sputnik reported.

One of the most significant measures under consideration is the previously reported push for joint organization of trade in gold. In recent years, China and Russia have been the world's most active buyers of the precious metal. On a visit to China last year, the deputy head of the Russian Central Bank Sergey Shvetsov said that the two countries want to facilitate more transactions in gold between the two countries.

"We discussed the question of trade in gold. BRICS countries are large economies with large reserves of gold and an impressive volume of production and consumption of this precious metal. In China, the gold trade is conducted in Shanghai, in Russia it is in Moscow. Our idea is to create a link between the two cities in order to increase trade between the two markets," First Deputy Governor of the Russian Central Bank Sergey Shvetsov told Russia's TASS news agency.

In other words, China and Russia are shifting away from dollar-based trade, to commerce which will eventually be backstopped by gold, or what is gradually emerging as an Eastern gold standard, one shared between Russia and China, and which may day backstop their respective currencies.

Meanwhile, the price of gold continues to reflect none of these potentially tectonic strategic shifts, just as China - which has been the biggest accumulator of gold in recent years - likes it.

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Giant Meteor's picture

But of course ...

And shit, can you blame them ?

Now folks know, "why the Russian meme"?  - what happened to the love affair with China?

Fucking math, all along ..

Blue Balls's picture

Fuck the J-mafia.  Fuck the NWO.

philipat's picture

They are presumably also looking at combining their new SWIFT-equivalent Interbank payment systems, which would provide even greater (and mutually cross-beneficial) independence from the USD and immunize against the inevitable next round(s) of US bullying for not acepting everything the US wants, a/k/a sanctions. Use of this system would also protect most of ROW from such bullying also. Any wonder that Russia and Cjina are on the MIC shit list?

MagicHandPuppet's picture

For some odd reason, I suspect even this will boost the #fakeMarket stawk prices.

Anywho... the slaves-in-denial here in the ol' U.S. are approaching a taste of reality one of these days.

Mano-A-Mano's picture

I will say a prayer for y'all, while I enjoy my cheap Mexican pesos South of the border.

Giant Meteor's picture

Christ you guy's, this bot script gets better and better. I almost upvoted all y'all ...

BaBaBouy's picture

GOLD Is The New Dollar ...

Watch as CB's start adding to reserves around the world to ward off Market Crashes and maintain some confidence in their Bonds...

2017 May be the Year ~

The_Juggernaut's picture

lol @ Putin being China's bitch.

eforce's picture

"This hatred will be still further magnified by the effects of an economic crises, which will stop dealing on the exchanges and bring industry to a standstill. We shall create by all the secret subterranean methods open to us and with the aid of gold, which is all in our hands, a universal economic crises

 

Whereby we shall throw upon the streets whole mobs of workers simultaneously in all the countries of europe. These mobs will rush delightedly to shed the blood of those whom, in the simplicity of their ignorance, they have envied from their cradles, and whose property they will then be able to loot."

 

--The Protocols.

LibertarianMenace's picture

"These mobs will rush delightedly to shed the blood of those whom, in the simplicity of their ignorance, they have envied from their cradles, and whose property they will then be able to loot."

 

So the reptilian authors of this document foresaw their own demise? They're not all bad, perhaps I may have to reconsider the "simplicity of my ignorance."

eforce's picture

The Protocols speaks of the money changers as a seperate, lower, entity, one that "we" are supposedly going to "shed" / "loot", taking us to the next stage, a more direct rule by those who really hold the power.

Zero_Ledge's picture

Hey, anybody remember when Trump promised to label China a currency manipulator "on day 1"?  Gee, I wonder why that didn't happen.

JamesBond's picture

"...and anti-terrorism measures between China and Russia."

 

They're talking about us

 

jb

Reichstag Fire Dept.'s picture

..."lol @ Putin being China's bitch."

Is he?! Russia just isn't the monster that the USA make it out to be.

Russia is slightly larger than Canada in terms of area, has 5 times the population of Canada but only has the same GDP as Canada.

Qusetion 1: If Canada had nukes like Russia would we be considered the same threat to the USA as Russia is?

Question 2: If Obama hadn't sanctioned Russia, would Russia have turned to China to be the consumer of her basic materials on a wholesale level as seems to be the case now?

Answer 1: No, Americans know Canadians are not inherently evil. You could never fool Americans THAT much. (Russians are not inherently evil either, btw).

Answer 2: Obama's sanctions against Russia made Russia the biggest oil producer in the world (now ahead of Saudi) and soon to be the biggest basic materials provider in the world (ahead of North American owned resource producers world wide).

Thanks Obama! 

Tallbert's picture

Gold will be the new world currency.

America will be screwed. With a new gold standard there is no way to steal the worlds assets with printed dollars.

https://socioecohistory.wordpress.com/2014/07/26/flashback-1988-get-read...

silvermail's picture

This article by Dmitry Kalinchenko was written a long time ago.

It's fantastic, but that's exactly what's happening right now!

http://www.gold-eagle.com/article/grandmaster-putins-golden-trap

brianshell's picture

Error. The early goldsmiths kept your gold in their vault and gave you a paper note. But they then counterfeited more paper notes without gold to back them. Thus began what culminated in the Federal reserve. It matters not what is said to back your notes if counterfeiting and interest is charged for production of notes. Fractional reserve banking is counterfeiting. This reduces the value of notes in circulation. The ferderal reserve also charges interest to create notes which makes every note in circulation worth less. The 1913 dollar is now worth two cents. The other 98 cents went to the federal reserve in compound interest.

Unless you trust sovereigns to issue debt free money and regulate the quantity, you will have never ending loss of value in notes.

Money  is simply an IOU. It is a temporary marker to note an obligation between people. Once the obligation is fulfilled the IOU is destroyed. There is no time value called interest. Just as gold value does not change except by mining more so money IOUs do not change in value over time.

LibertarianMenace's picture

The counterfeit should have no barriers to entry. Even a caveman should be allowed to do it. Seriously.

The note issue must be competitive, gold, silver, copper, nickel, just about anything but .guv promises can form the specie base. Issue your notes from there, and then margin call, gentlemen, at the end of every day's business, NO FUCKING EXCEPTIONS.

illuminatus's picture

You mean like last year, and the year before and.....

decon's picture

This article says Japan is the 2nd largest gold producer. I don't think so.  Wonder what else is wrong in the article?

OhNo's picture

Ausrtalia is the 2nd largest gold producer and china is number 1 and they dont export any of it. My opinion with the gold price is why would NWO eg lizards want pay more than 10 to 20 percent over mine all in cost production ? only to keep the mine in production

rtb61's picture

Gold is too difficult to remain that long but it will allow the crippling of the US dollar, until a new currency is created, logically an energy currency, with uranium at it's core. Gold is nothing but temporary step, with an energy currency likely to appear, as the easiest means to trade energy and of course all other products and resources. It will pretty well kill fake currencies like the US dollar. The energy credit with cross correlational transcation based around energy types and the ease of export and import. It will take a few years, quite a few.

Just looking at Russias growing gold production, likely there are some new Russian gold reserves to be announced, nothing by chance for slavs.

yogibear's picture

Fed is floating a rumor of giving every household a million dollars.

http://www.oftwominds.com/blogapr17/fed-fools4-17.html

 

Osmium's picture

At the end of the article.

DISCLAIMER: this essay was written in the spirit of April Fool's Day

strannick's picture

Is this an April's Fools Day gag? If not, gold's gonna go. By gold I mean the shiny heavy kind, not the digitized, comex futures, unallocated, GLD ETF, hypothicated non deliverable, leased, deep storage, Central Bank unaudited infiinite kind

BigJim's picture

There's absolutely NOTHING in any of the links in the article to suggest that "The Russian central bank opened its first overseas office in Beijing on March 14, marking a step forward in forging a Beijing-Moscow alliance to bypass the US dollar in the global monetary system" had anything to do with planning "to phase-in a gold-backed standard of trade."

After ten years of this bullshit, I've had enough. NO country wants to re-introduce a gold-backed standard of trade. It limits "our" leaders' options too much. And it's about time we accepted it.

The only hope goldbugs have of seeing their precious substantially appreciate in value is if the monetary order between countries breaks down. The more countries are coordinating monetary policy together successfully, the less likely that is.

Bay of Pigs's picture

It is the bypassing of the USD that will drive gold higher and diminish its influence as the WRC. Did you miss that part? China and Russia both love gold and understand its role and importance as a monetary asset.

This news is very positive for gold.

Sector Catalyst's picture

I argue that the vampire jew squid ghoul globalists will collude to drive down the value of gold further to try and throw a wrench into the works.

buttmint's picture

Jim Willie has been all over this crucial shift to the Eurasian Trade Zone...

https://www.youtube.com/watch?v=ggIbQW1BbIg

--

Indiana1's picture

I agree it's the bypassing of the dollar that is the goal and will drive gold higher.  Russia and Chinese governments would likely love fiat as all governments have, but right now the way for them to take power back is to have gold and to bypass US influence. 

El Crusty's picture

Attempting to drive down the price of gold won't work.
If the Russians and Chinese move to a precious metals backed currency the US only has 2 options at that point
Go back to the gold standard or go to war
Guess which one we get goaded into?

The Navigator's picture

This news is very positive for gold.

This news is very positive for war.

Everytime a country says "we're moving to gold, to sell oil, gas, (or move away from the fiat USD for trade)", we ramp up drones/rhetoric about 'unstable governments'

See Libya, Iraq, Russia.

Putin, Putin, Putin, Evil, Evil, Evil, Russia, Russia, Russia, Evil, Evil, Evil, aren't you brainwashed by now? If not, read more Time or USA Today, or watch more CIA prop on CNN/ABC/CBS/NBC.

When the truth slaps you in the face, I hope you have stacked Au, Ag, Pb, tampons, heirloom seeds.

kaboomnomic's picture

Well.. If you fucking bother to do 1 google search? You'll find the links.

Here, DIRECT from Russia Central Bank website,

China OPENS branch office to clear Yuan's, in Russia,

https://www.cbr.ru/eng/Press/?PrtId=event&id=978&PrintVersion=Y

Russia Central Bank OPENS branch in China,

https://www.cbr.ru/eng/Press/?PrtId=event&id=970&PrintVersion=Y

Unlike US? Or the Western world in generals? They don't do STUPID things..

http://russia-insider.com/en/putin-explains-difference-between-us-and-ru...

There's a YT video showing Putin's saying it. If you want to know, whether that news is true or not.

And btw, this is current Russia current account,

https://www.cbr.ru/eng/

399 B$ in value. Value before western world sanctions? 420 B$.

Looks like that sanctions does pretty darn good effect for Russia...

 

 

 

 

Lore's picture

God, it's so REFRESHING to listen to comments from a genuine national LEADER who has a BRAIN and talks SENSE and isn't a PANDERING CULTURAL-MARXIST PUPPET LIBTARD.

Sincerely, A. Canuck

P.S. Take our Prime Minister -- PLEASE.

shamus001's picture

Bigjim sounded a little panicked there in his assertions; likely works for the Fed, or is shorting gold heavily! LMAO I can't wait for you fiat F*cktards to finally take your losses heavily!  :HINT: No one in the U.S. wants to work daily for your printed crap paper - pay close attn to Utah and AZ.  This realization is increasing, not decreasing.

BigJim's picture

I'm not panicked. Just bored with hearing breathless fucktards telling us Russia and/or China are going to back their currency with gold. No, they're not; not willingly, at any rate. And no, their CBs buying gold is not evidence they're going to back their currency with gold, either.

I'm long gold and silver, but fuck, I wish I'd sold and locked in my gains back in 2011.

But you guys can keep cradling your shiny like it's some kind of religious fetish. Repeat after me: The goal is capital preservation, or even capital gain. The vehicle is irrelevant, though I agree the fact there's no counterparty risk with PMs makes them attractive in certain scenarios, and was the principle reason I started buying them ten years ago.

BigJim's picture

The discussion isn't whether Putin is a better leader than Obama or Trump, or more patriotic; the discussion is whether any country has announced they intend to back their currency with gold.

No, their central bank having large reserves of gold is not the same thing, ignoramus; backing your currency with gold means creating no more currency than you have gold to back it at a specified, fixed  ratio of unit of currency to ounce/gram.

Show me a government official stating they're intending to do this.

Crickets. I rest my case. Now go get your shinebox.

Stuck on Zero's picture

A gold standard is useless as long as there is a country that will accumulate gold like a black hole.  India, of course. At any cost whatever some cultures accumulate the physical metal thereby starving the world of currency to trade with.  It happened to the British it will happen to the Chinese and Russians.

Teja's picture

Also, a gold standard will not allow permanent trade deficits. That is actually what is happening in Europe, internally the Euro is a quasi Gold standard. Won't work. With a WW gold standard, all economies will be on "cold turkey" regarding imports in no time.

Actually the border tax scheme could be a first step into that direction. Will be very interesting to see what happens.

BigJim's picture

 Also, a gold standard will not allow permanent trade deficits. That is actually what is happening in Europe, internally the Euro is a quasi Gold standard. Won't work. With a WW gold standard, all economies will be on "cold turkey" regarding imports in no time.

Actually the border tax scheme could be a first step into that direction. Will be very interesting to see what happens.

How do you run a "permanent" trade deficit? The US only manages it because it issues the world reserve currency; once it (inevitably but not imminently) loses that privilege, the dollars will flood home and wreak havoc.

The fact that a gold standard make running large trade deficits difficult is a good thing.

Teja's picture

The fact that a gold standard make running large trade deficits difficult is a good thing.

The fact that a gold standard make running large trade deficits difficult would be a good thing if the countries and governments involved would not look into an easy way out again. You would need a World Government to make sure there is no exit by fiat printing. Don't think you would want this?

BigJim's picture

 A gold standard is useless as long as there is a country that will accumulate gold like a black hole.  India, of course. At any cost whatever some cultures accumulate the physical metal thereby starving the world of currency to trade with.

Sorry, this is wrong. If there's a gold standard in place, Indian buying and "hoarding" it is no different to people putting savings away: it pushes up the price of gold relative to everything else, and, as it's price rises, causes price deflation, encouraging dishoarding as savers see prices drop.

People around here seem to think I'm anti-gold. I'm not; the gold standard, for all its flaws, was infinitely superior to what we have now (for the average man, at least). But that's not the same thing as believing it's coming back any time soon, or believing PMs are some kind of sure-fire bet. They really aren't.

BobEore's picture

First of all...

you're not supposed to read these pieces so carefully. Nor should you be wasting your time parsing the content for logical consistency nor factual value. The object of the post - and by default, the sole mission you should be undertaking here BigJ,

is to celebrate the arrival of "happy times"... in the form of a new 'GoldOrder'...

for the 80,000th time! Now do you get it? Otherwise, man, you are jus gonna get showered with down votes from those who have actually followed the unspoken rule to leave critical thinkin with the hat check lady...

and squander all hope of ever becoming one of those zheeple who measure the value of the their contributions here by the degree of popularity they can muster by repeating the chosen mantra/meme of the moment!

Hope this helps... remember Jimbo,

ALWAYS follow the crowd*.. even if they are heading vertical over the cliff. Onwards!

You can read my own comment below on this thread... and learn how it's done. Oopps... I think I screwed up, and forgot the rules meself!

delacroix's picture

when did japan become a top 3 gold producer? stupid mistakes like that, tell me, the writer of the article is just spittin out what he"s been fed.

BigJim's picture

 when did japan become a top 3 gold producer? stupid mistakes like that, tell me, the writer of the article is just spittin out what he"s been fed.

I suppose if a non-gold-mining country (for some reason) suddenly started selling their gold hoards in large enough quantities they might enter the (annual) list of top three "producers". I have absolutely no idea if this is true in the case of Japan, but I agree with you it seems highly unlikely.

garypaul's picture

and also, since when is Beijing "overseas"?

[to Russia that is]