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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Eeyores Enigma's picture

If gold is still priced in dollars and the dollar is the best deal for buying and selling gold what good does it do to say, hey look over here we are selling gold in yuan or ruble?

short screwed's picture

The question is how long can US gold market stay solvent. It's a well known secret that the gold is not there to cover all of the naked shorting that's been going on. What's the advantage of buying gold in dollars if you can't take delivery.

auricle's picture

There must be a revaluation higher for gold in order to make a reappearance in financial markets. At these depressed prices in fiat terms it's a ripoff to do trade with. Encouraging to see them moving back to gold by setting the trade infrastructure up.

earleflorida's picture

why was an iranian agent detained smuggling gold into the ussa last week

earleflorida's picture

mar.28,2017 3:41 post @ ZH

google:    Reza Zarrab     (Turkish/Iranian)

who's buying the GOLD?

obviously they wanted the story outed...? for what reason is beyond me!

Note:  Iran the cub child of the Mad Russian Grizzly, and the Turkey, always trying to get a presidential pardon , as in a blessed thanks`giving$ 

holdbuysell's picture

Gold-backed trade notes: Jim Willie has so far been spot on.

besnook's picture

gold is a barbaric relic that has no intrinsic value. if that is true what is paper money unless it is exchanged for intrinsic value, i.e., gold?

dizzyfingers's picture

Toilet paper? Must laugh...can't cry all the time.

besnook's picture

the zionazis are not happy about this. moscow and beijing must be kaddafied yesterday

espirit's picture

Watch out for falling Banksters and the divots they leave behind.

Heads exploding in realtime require self protection via SpatterShield.


Crocodile tears from the Pols won't cut it anymore nor will their vile hatred of humanity.

Weapons Free...

DingleBarryObummer's picture

The ZOG machine cannot afford this.  They will not go down without a fight. 

debtor of last resort's picture

Offshore $ is going down the drain. They will come on shore. All of them.

nightshiftsucks's picture    Navy Seals are going to expose the satanist pedophiles,donate early and often.

Tiwin's picture

Navy seals are going to perpuate the 9-11 LIE and say they 'got' Bin Laden.

Dragon HAwk's picture

page not found, that was a quick pull


Anopheles's picture

What a bunch of moronic speculation.  Just because an idiot reporter mentions gold and trade in the same article, it's a massive, illogical leap to say that China will have a gold backed currency.

China has zero intention of creating a gold backed currency.  There's absolutely no advantage for China to do that.

Anyone who believes otherwise better take another big gulp of Koolaid.

Winston Churchill's picture

Of course they don't want to.But they will need to.

Without doing it, the yuan is just another fiat with no real incentive to change.

History shows all hegemons starting with sound money and then devolving to currency

adulteration as quickly as they can.But always with sound money at first.

Scuba Steve's picture

Thats why "Gold-backed trade notes" mentioned above make sense ... a lot of sense.

Anopheles's picture

The only one who mentioned gold backed trade notes was the REPORTER.  He pulled that one out of his ass.

Russia just wants to sell gold to China. That's why last year one of the Russian banks that has a gold export license, bought a membership on the Shanghai Gold Exchange.

Doug Eberhardt's picture

Phase-in a gold-backed standard of trade?




I own a precious metals company and believe in the purchasing power of gold, but these false connections or assumptions of a gold backed currency are silly. 


Central banks or governments of China and Russian aren't going to go out of their way to make their currencies stronger. To be competitive and increase GDP, you need a weaker currency to make your shit more attractive on the global stage? Why would China stop doing what has got them so much growth, taking it from the U.S. with a weaker currency than the dollar? 


espirit's picture

Follow the $BDI much?

Captain, shesa about to take a dump...

Doug Eberhardt's picture

"Follow the $BDI much?"

Yes, I do, I have written about it in bothy my books which eventually call for a deflationary credit contraction; which is dollar bullish. What's your point? 

GRDguy's picture

Agreed! How else are those governments going to continue to lie and steal from all of their citizens if they don't devalue their money.

They're certainly NOT going to increase its value.

wwxx's picture
"Doug Eberhardt Apr 1, 2017 7:34 PM

Phase-in a gold-backed standard of trade?




I own a precious metals company and believe in the purchasing power of gold, but these false connections or assumptions of a gold backed currency are silly."


To replace the dollar standard, or at least have an alternative to it may seem silly, & yet there it is.  I don't address you personally, but the question of silliness seems worthy a reply. 


I thought the article explained well, the how & why, I'm not surprized that some cannot even conceive of an fiat alternative, --but not just fiat-- but at the central bank level, as an alternative to the 'helicopter bens' of the west.  It is well known Russia didn't go down the silly ZIRP yellow brick road of the last 10 yrs. as did nearly every other country has demanded, by law & contract. 


Yes I think that ZIRP, and the governorship of it, commonly dubbed 'THE NEW NORMAL' is and has been beyond silly.  I would like to think that the Ruskies & Chinks think the same thing [as silliness goes]..., as central banking, international in scope have quickly & decisively learned a terrible, deadly lesson in the last 40 yrs. & recently 8 years at the hands of the 'silly' new normal M. Friedman-ist such as The Bernanke & Co. 


They rejected the gold standard in 1971.  Destruction is their creed, these Friedman-ist, their liquidity traps, their fraud, their extreme money printing, their secret code, not without the same sponsorship of every other Central bank, EU & bla, bla, bla, around the world.


Just so ya know, I think it is silly for anyone to trade their physical PM for lousy, highly inflated fiat dollars, or American land for example, only to be manipulated at high levels 2 billion at midnight type transactions, have become 'the new normal' to keep the price well steeped in chaos.  As some midnight in the future, someone with flip their switch & the choice will have been made for you, now will it be for more fraud, mountains more of it, or as some of the silly such as I, might hope for a real alternative. 


Well what about this 'dollar standard', based in oil & might to high degree, but more importantly than the value of oil, or any PM, the dollar fiat remains drenched in fraud, and even at the central bank level, I think an accomplice to it.  As the USA, and others have made such things legalized by contract & deed.  As in 1985 CDS credit default swaps, made legal by the new really can you imagine the ruskies & chinks within their alternative will choose 'legalize' fraud into their system? 


I think probably not, because by definition 'an alternative' is opposed to the new normal', that is to say they will quite probably develop their standards based on classic economic practice not fostering the deadly tactic the USA has not only consumed the world with, but in 2007 the NEOCONS turned it upon themselves.  For all the world to see & feel to this very day.


So I guess what I'm saying is: it isn't so much the 'gold backed currency'...rather it may well be the alternative to 'the new normal' has presented itself in the east.  And to the shame of the American cutthroats they refused all the good achievements and chose destruction, long time now.






Giant Meteor's picture

Very pleased to be the first upvote on this ..

Will be re-reading a few time to let it thouroughly "sink" in ..

Thank you ..

Scuba Steve's picture

" at the hands of the 'silly' new normal M. Friedman-ist such as The Bernanke & Co. "

Curious: You have some links from Friedman essays that is anywhere near Benrnake & Co to back your comments up?

wwxx's picture
"Scuba Steve wwxx Apr 1, 2017 10:56 PM

Curious: You have some links from Friedman essays that is anywhere near Benrnake & Co to back your comments up?"


No Friedman essays, sorry.  The best read I highly recommend is Naomi Klein's 'The Shock Doctrine' which is often found in used paperback for less than $10, that documentation is a detailed account of how the 'Chicago boys, Harvard, & FoMoCo' & a whole host of others have conducted their M. Friedman-ist experiments in the past & unto this very day.


I suppose that ZH has published thru the years all sorts of FRED graphs, documenting QE, and what QE consists mostly of, typically the graphs show a legalized printing trajectory, the likes of never seen before, absolutely intentional in purpose, nearly vertical in scope.  Although The Bernanke has used the usual excuse [as there is a roulette wheel of excuses] QE & other related processes were suppossedly to prevent further economic collapse of 2007-8, their scheme is on schedule, to economically rule for at least the next 50 yrs.  H. Paulson, Geithner, & the like, all seem to claim the M. Friedman-ist agricultural alliteration of tillage & destruction, which is suppossedly to yield fresh new green shoot of progress, I guess that is well known.  But that is the lie, & C. Shummer & others in congress where only too happy to fork over plenty of supporting new law to usher in 'the new normal'. ---Was there even a thought in congress [in 2007-8 or since], a mere notion even, to put a halt upon CDS & the legalization of said pyramid schemes? [that caused the economic hiccup of 2008]---absolutely not!, for this is the direction, the M. Friedman direction that the sell-out congress whole heartedly supports, by law & deed.   I guess this link might be helpful.



Doug Eberhardt's picture



My point was that governments and central banks of Russian and especially China aren't going to stop "what has been working to give them all the power they have accumulated" by all of a sudden switching to a gold standard. That' is "silly" to think they would do that. Why would China not first drain us of more of our wealth by keeping the value of their currency lower and lower, making their products more and more in demand? There is a reason why their GDP overall has blown away that of the 20 year decline of U.S. Real GDP. The Chinese can wait 100 years for our system to fail before making any currency moves if you have studied their history (they were the first to create fiat currency so they may know a thing or two about this). 


The dollar isn't based on oil but on what makes up the Index, and the Chinese Yuan or Ruble aren't even a part of the Index. Why dont' you give them a little time to strengthen on their own merits before assuming they will strengthen by tying their currencies to gold? 

Putrid's picture

There are several advantages for the East gained by switching to Gold, the most important is that it would destroy the Military Industrial Complex that threatens their very existence.

I fear you're thinking like a business man, looking for some win-win partnership, but the psychopaths at the Top only want to win.

And there are some deep seated Vendettas out there. Don't forget that motive. Ever.

Doug Eberhardt's picture

Putrid, said; "There are several advantages for the East gained by switching to Gold, the most important is that it would destroy the Military Industrial Complex that threatens their very existence."

Isn't China building a formidable military on a cheap currency, and by the time the U.S. implodes from their own currency miscalculations, be in a position to take over the role of go to currency without any gold relationship? 

Remember, the U.S. at present controls 70% of the world's flow of money. But it is China that is benefitting through their manipulation of currency. The U.S. has already sold their soul to the company store. China just needs to sit back and wait for implosion and eventually take over the money flow in the world. 

Putrid's picture

From correspondence I've been privileged to read, the monetary stand off has been diffused. There is agreement between the Rotschild Family and the East. Trump is their guy; and they also control the U.K. completely.

See my comment history, just before the election in November; I informed Hedgers that Trump was being protected by a Family. Some listened; the children listened to Tyler.

The monetary issue is ok, aside from the "dirty nuke" or assassination wild cards by the pro war factions. So War is still a major danger.

The big issue, the intractable one, is that the Natural System is dying. The oceans are dying as is several important inputs e.g. Oil. That's what scares the shit out of me.


Doug Eberhardt's picture

Putrid, agree on the capitalism vs war option. On the same page with you there and my 2nd to next book works towards that goal. We are up against it though. (and I didn't down vote you)

wwxx's picture
Doug Eberhardt wwxx Apr 2, 2017 4:37 AM

My point was that governments and central banks of Russian and especially China aren't going to stop "what has been working to give them all the power they have accumulated" by all of a sudden switching to a gold standard. That' is "silly" to think they would do that.

I don't know much, about strengthening of one currency over another...the advantages & strategies seem beyond my aptitude. 


But I think that because the eastern alternative is being built, [as ZH has previously reported] there must be a foundation.  That foundation is gold, at least that is what this article clearly states, as if it will be a law, the eastern co-op has to have some kind of a poker chip to play with.


So who will flock where & why, is anyone's guess.  For many, yeah legions to remain in the fiat & electronic is a given, they rather enjoy flogging each other out of their jewels, especially if there is a slight of hand involved...'it' isn't called a casino for nothing.  That is why 'it' resembles a circus, sensational, deadly, quite the addictive rush, and at present even the western contracts are dubious, overturned and unsettled before judges for what seems like fraud, but is often deemed OK.


The name on the poker chip doesn't really matter, gold, oil, indexed, I can agree, what matters for me is for those that refuse to enter the casino...what silliness splatters upon them? 


That is supposed to be the responsibility of the government(s), to provide not so much for the casino goers, but economic stability of the country/people in general.  What can I say, there use to be such a thing as CD [certificate of deposit] and within the age of ZIRP, I guess those are non-existant now unless you want one of those negative instruments.  And there is the fleecing of pensions recently in the news, Chicago, Dallas, teamsters in NJ, herded into 'the casino' by the ZIRP strategy & a few rascals...have a few bond ratings become altered of late...for sure.  There is a [government] fundamental responsibility to the environment, including war[s], of which the US Congress happily relegates for a price, to the casino, privatization if you will.


Can the eastern co-op, based in gold play a different game?...maybe not that much different, as devices have many different constructs, but I respect their ability to at least set-up a different casino, which is based on a poker chip, in this case a gold one.


Will there be 'a giant sucking sound' to the gold chip casino...doubtful from a western point of view, but for the far east there is sure to be an anxious volume, not in a hundred years, but quite possibly tomorrow.   hahaaa



Doug Eberhardt's picture

wwxx, I do cover quite a bit of this that you addressed in your reply in my latest book Illusions of Wealth. 


I guess the bottom line with China and Russia and a gold backed currency suggestion that the article states is this; not until the central bank scheme is removed. And I just don't see that happening. 


I sell gold for a living and could come up with many schemes for people to buy but I try to keep it real with my analysis and not speculate on the unknown. Sure, one can make assumptions, like Rickards and SDR's which I debunked.


...but I don't think there's a remote chance any gold backed anything is coming anytime soon. Of course one can create their own gold backed currency now by buying gold anywhere in the world today and not wait for a backed currency. A backed currency itself is open to failure as well because governements eventually will abuse the system. That's all they know how to do. 

Thansk for your thoughts though. 


From a technical standpoint I do write about gold and the markets 5 days a week with an ETF service I run, where we don't care what direction any ETF goes, just that it has an established trend that we can trade profitably. Unlike the Vegas casino, we profit, haha! That's what it's really all about. 

Putrid's picture

Here you are:

Putrid Oct 30, 2016 5:31 PM
My contacts with The Families said Trump was being protected, that was months ago. Correspondence implied the Ponzi would be unplugged if the neocon candidate won in November. They'd do it before world war 3 kicked off. I even mentioned it in the latest edition of Before The Collapse that was published a few months ago, last chapter.

Well, a Trump presidency will probably change the time line for gold and the ponzi. Thank God.

Cathal Haughian

Non-Corporate Entity's picture

Is this the part in "Titanic" when the ship, having already taken in too much water, begins to break in half? I'm beginning to see two big wolves eyeing the wounded alpha wolf, if you know what I mean.

short screwed's picture

I think it's the part when they start loading all of the 1st class passengers into the lifeboats telling everyone that it's just a precaution. There will be plenty of time to get the lower class passengers into the life boats later.

Giant Meteor's picture

That would be the one ..

Btw .. I found this fascinating youtube clip the other night.

Strange the things we humans find fascinating ..

Titanic sinks in REAL TIME - 2 HOURS 40 MINUTES

stecha's picture

Can you say "BRICS"? Brics nations will control the new world order. While we got tender with the nigra and his hillary whore, the rest of the world past us by. Get ready to be held accountable for all the last 40 years of wars. Ill bet sanctions so cripling that only can a da will feel sorry for us. Fucking polotical losers crippled this country and has probably killed us all..

me or you's picture

As soon as Silk Road opens nobody will trade with the Satanic US.

Xena fobe's picture

So domestic manufacturing will return.  There will be no money printing to fund anchor baby welfare. Chinese speculation in US property markets will cease.  What's not to like?

Kiss_My_Schnitzel's picture

in my goldmember voice 'I LOOOVVVEEE GOLDDD!!!!'

HenryHall's picture

>> The Russian central bank opened its first overseas office in Beijing on March 14

Presumably the Russian central bank has only had overland offices in Beijing in the past then?