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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Nobodys Home's picture

Yah. Duh! Aren't they like right next to each other or something?

johand inmywallet's picture

Why do I see a nuclear exchange in the next few months?

Stock up on new batches of potassium iodide!

Savyindallas's picture

goddam neocons and zionist banksters fucked us. Re-Christianized Russia and Putin refused to succumb to debt slavery and sefdom to the jew Rothschild Oligarchs  so like when Hitler took back the german media and control of government from zionist jews, the Banksters sought to destroy Russia and Putin, rather than work with them.

Russia should be an ally of the West-but since the West and US are owned and or dominated by Rothschild jews and their Rockefeller Skull N' Bones criminal partners  -I guess that was not possible.  Now Russia is lost to the East-while the Western ZIo empire seems to be crumbling and lashing out-possible preparing for a ruinous war to save their sorry asses from revolutions from their own populations. 

messystateofaffairs's picture

 If the sheeple masses knew what ZH'ers know the zio fucks would find themselves financially and politically castrated forthwith.

Nobodys Home's picture

I read a comment recently, don't know if it was from an article here or not...."A well organized minority will always beat a disorganized majority." (not verbatim)

It seems to me that the left is organizing big time....

It seems to me that the right...Most of us here and those like minded, are not and have no connections but for sites like ZH, Breitbart, Drudge etc...and lame republican political crap sites.

No right sided organizations are doing anything to counter the Soros funded and idealized leftist communist rabble rousing and promotion of violence.

Nobodys Home's picture

Only thing I disagree with in your comment is that I believe they want a revolution and are fomenting it as we type. Jack boots on our throats kinda thing.

TeethVillage88s's picture

Repost from earlier Trump Fake News on MSM story:

2nd Greatest Story of 21st Century:

- How 17 Intelligence Agencies, Supreme Court, GAO, OCC, CBO, OMB, Treasury, SEC, FTC, FDIC, Democrats, Republicans, can't find a legal mechanism or framework to Report, Respond, Take Action to Correct Federal Agencies, US Congress, and US Presidential Mistakes in Morals, Logic, Principals, Procedures, Strategies, Objectives, Missions... and plain Fraud, Vote Rigging, Racketeering, False Charities, Sedition, Treason.
- If Steve Pieczenick is telling the Truth and IC leaked classified & sensitive info to Wikileaks & Julian Assange, THEN this is PROOF of US federal Govt Coup & Racketeering if not all the others above
- US World Empire is REAL, therefore if the Govt is breaking down in front of the public, Europe, Latin America, M.E., Russia, & Asia, THEN A) World Peace is in Trouble B) World Economy is in Trouble C) World Reserve Currency is no longer Stable D) USA can no longer be TRUSTED by it's Allies

And those are just the first Obvious observations, implications.

IF USA is in CHAOS, then who steps into the Power Vacuum?
- China, BRIICS, China-Russia?
- Global Govt?
- US Treasury & Federal Reserve = Now need to MAKE Public Announcements regarding USD

Giant Meteor's picture

That's why I camp out on these threads .. would not have wanted to miss this one.


TeethVillage88s's picture

Giant Meteor. Thanks. Enjoy your stuff when I have a clear head and have time to read. It's always been hard to keep up in Zerohedge!

Silver Savior's picture

I agree with bypassing the dollar. The dollar is a lot the problem. 

Nobodys Home's picture

You're right it is. But bypassing it will be the biggest problem the world has ever seen.

Davidduke2000's picture

WHY? the dollar is artifically inflated making american goods impossible to sell.

Scuba Steve's picture

Disagree, only libatards that do not believe in SELF would believe that.

The American Common Man has brought almost all ingenuity into the World as we know it.

It can be again if you rip off the Scab of the American Elite that hold us back under Fiat manipulation.

Get the fuck out of the way and let the US Common Man handle things on a level playing field and we will win.

We Are The Priests's picture

Next up, gold/military backed trade note issued jointly by Russia/China to be used throughout the BRICS, replacing US T-Bills/Bonds as trade settlement currency in those countries; at least according to Jim Willie, whom, I would imagine, Tyler is heavily sourcing for this article because it's almost verbatum of the Golden Jackasses last few Hat Trick Letter's and recent interviews

The key pivot point to all this now largely rests with Iran.  Trump/Iran showdown this year?

Please pass the popcorn!

hotrod's picture

It's the right thing to do.

Silver Savior's picture

I would laugh my ass off if the dollar lost world reserve status. 

Nobodys Home's picture

I won't. That will suck for me....even though I know we were assholes to the world to build it up. At least we were the best assholes on the entire planet. Mom always said: "If you're going to do it, do it right and be the best!"

Giant Meteor's picture

Also, dress for success , and no matter what sweetheart you can be anyone you want, even the President of the United states!

Fuck that !

Nobodys Home's picture

Yah. But my teeth are really discolored.
You can grow up to be president if you want to and work hard enough. You're right GM. I remember my Protestant mother saying that. Work Hard enough and you can do anything!
Yah. Right. Have some more kool-aid mom. Tang's pretty good too. Shit! The astronauts drink it! Have an Instant Breakfast and a Swanson frozen TV dinner!
I was a brown Eagle Scout. Order of the arrow and the whole shebang....almost became a Mason too...Grampa was a 33rd degree....decided not to. He was an asshole.

Giant Meteor's picture

God Bless ya my son ;)

Big grin here ...


Fascal rascal's picture
Fascal rascal (not verified) Nobodys Home Apr 1, 2017 10:22 PM

Sometimes life beats one so bad.. they become BIG FUCKING CRYBABY PUSSIES.

Xena fobe's picture

It would be a blessing since it would mean the end of debt serfdom via central banks. 

NobodyNowhere's picture

New World Order is looking more and more like it's going to be back to the caves and then the ovens.


messystateofaffairs's picture

Japan the worlds second largest gold producer? Surely you jest.

short screwed's picture

I thought the same thing. Who knew?

lie_to_me's picture

They meant dried seaweed producer

Nobodys Home's picture

Nuthin like watching the end of the petrodollar and the world as we know it.

afreeman2's picture

There was a time when we could have worked with these countries to have good relations with them them as partners. Instead, the "powers that be" wanted to further their global agenda and put themselves at the top of the heap after screwing them out of everything they had. Nice job you stupid jerks. You could have had it all but you pissed the opportunity away. I doubt that the results of that screwup are going to be very pretty...

Xena fobe's picture

We could have worked with BRIS.  Not C.

Lost in translation's picture

OT. Or maybe not.

Sold my M1 Garand after reading ZHer comments about selling assets in favor of silver. Not sure if I made a mistake.

Reasoning was that I should sell high Dollar-price property now, and get small(er). An SKS and 12 gauge will suffice, and complicated, high $ pieces requiring enbloc clips and special-pressure (expensive) ammo should be liquidated before overseas Dollars come back home...

Or, like I said before, maybe I screwed up.

Nobodys Home's picture

I've been waiting for those S. Korean M1s to come home.
Got a mini14 with a Garrand mechanism...should have got a mini 30.

HRH Feant's picture

You will do fine. Good choice.

Monico Sailer's picture

Be careful of listening to anyone on here.  I mean in the time that they have been bearish the equity indexes the dow has almost tripled.


Nobodys Home's picture

Keep Stackin Bitchezzzzz!!!!

Davidduke2000's picture

Who would buy toady an M!-Garand?  if you have said FN-FAL I would understand, but M1?

sinbad2's picture

I used an FN-FAL back in the day, great rifle, reliable and good range.

Davidduke2000's picture

The Garand was replaced because of its clip, when empty it jumps in the air and drops making a noise telling the enemy that you have no more bullets at a close range, and to reload a new clip in action is very complicated you have to pull back your rifle and fiddle with it for sometime before your clip is loaded. it was an accurate powerful rifle with a bad loading system and very heavy compared to M16.

any_mouse's picture

The M1 Garand had its moment. Everybody else basically had bolt action battle rifles, pretty much WW1 carried over to WW2.

Fixed magazine and weight are big negatives for a "modern sporting rifle".

Maybe more O/T, in Northern Minnesota the deer rifle of choice is a Savage autoloader in .30/06. Deer do not have offensive capabilities. In the years way back that I lived in Minnesota, deer hunting required a rifle of .25 caliber minimum with brass length not less than 1.5 inch. 5.56 is out, as is .30 Carbine (too short). 7.62x39mm would be okay.

Scuba Steve's picture

.308 Winchester, Nighthawk Nightforce scope and Soros in sights = NIRVANA

sinbad2's picture

A G28 would be my choice, if I could buy one.

bardot63's picture

I have an M-1 Carbine, Underwood, Dec. 42,  early serial number.  Hi-load clips, simple construction, light weight,  I think it's better than any multi-function plastic rip off of the M-16.  Fired at the range just a few months ago.  Three clips center mass from standing position.  I'm keeping mine.

Youri Carma's picture

Fun fact is that with these ridiculous sanctions on Russia the U.S. but also Europe dug their own grave.

WTFUD's picture

Yes but it's a nice grave in a real picturesque spot.

Nobodys Home's picture

Do you have to pay a "view tax?"

Dickweed Wang's picture

I bet the "white shoe boys" central bankers really love this . . . no wonder those two countries are on the "enemy number one" list in the "west".