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Chile Is Latest Country To Launch Renminbi Swaps And Settlement

Tyler Durden's picture




 

The dollar exclusion list is becoming bigger and bigger with every passing day as China gets ready.

For simplicity's sake here is the full list of "bilateral" arranagements in the past year as presented previously: "World's Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade", "China, Russia Drop Dollar In Bilateral Trade", "China And Iran To Bypass Dollar, Plan Oil Barter System", "India and Japan sign new $15bn currency swap agreement", "Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says", "India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees", "The USD Trap Is Closing: Dollar Exclusion Zone Crosses The Pacific As Brazil Signs China Currency Swap."

And now the latest: "China, Chile To Establish Strategic Partnership, Boost Trade... Launch Currency Swap and Settle In Renminbi"

China and Chile agreed Tuesday to upgrade their bilateral ties to a strategic partnership, and double trade in three years.

 

Chinese Premier Wen Jiabao and Chilean President Sebastian Pinera announced Tuesday the establishment of China-Chile strategic partnership and the completion of negotiations on investment-related supplementary deals to a bilateral free trade agreement.

 

China would like to be actively engaged in Chile's infrastructure construction and work with Chile to promote the development of transportation networks in Latin America, said Wen.

 

Meanwhile, Wen suggested that the two sides launch currency swaps and expand settlement in China's renminbi.

Read more here.

So to summarize, the list of countries that China is transacting with directly (that we know of), and bypassing the USD entirely, is as follows:

  • Japan
  • Russia
  • Iran
  • India
  • Brazil
  • and now, Chile

In other words, it looks like the BRICs already have their "bilateral" arranagements all sorted out, and are now quietly moving into other suppliers of key resources with swap deals, all without any mention of the word "dollar."

How soon until China re-dips its toe in Europe with a modest "bailout" nobody can refuse in exchange for a simple caveat: you get paid in renminbi?

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Tue, 06/26/2012 - 20:28 | 2563393 SHEEPFUKKER
SHEEPFUKKER's picture

BRICCs

Tue, 06/26/2012 - 20:32 | 2563411 Paul Atreides
Paul Atreides's picture

A Wen Wen scenario

Tue, 06/26/2012 - 22:34 | 2563718 Frozen IcQb
Frozen IcQb's picture

BRICCCs  Game On! Who's got the Puck?

Tue, 06/26/2012 - 20:28 | 2563394 fonzannoon
fonzannoon's picture

How soon before this hits the US in terms of inflation?

Tue, 06/26/2012 - 20:33 | 2563416 Paul Atreides
Paul Atreides's picture

How long is a piece of string?

Tue, 06/26/2012 - 20:39 | 2563438 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

A loss of faith in a currency causes it to collapse.  One thing overlooked is that all assets are denominated in dollars, so it doesn't mean that Americans hav to decide the fate of the dollar, but everyone does.

Watch the Euro in my hand....you are getting sleepy....very sleepy....

Tue, 06/26/2012 - 22:29 | 2563739 Frozen IcQb
Frozen IcQb's picture

Dollars? We don't need no stinking Dollars!
http://www.youtube.com/watch?v=-lj056ao6GE

Tue, 06/26/2012 - 22:23 | 2563728 Winston Churchill
Winston Churchill's picture

Depends on whether your measuring from the end or the middle.

I believe thats check followed by mate ,to the Chinese team.

Tue, 06/26/2012 - 23:26 | 2563885 potlatch
potlatch's picture

how many days is tomorrow?

Tue, 06/26/2012 - 20:29 | 2563402 Payne
Payne's picture

What are they going to do with all those dollars they don't need? buy gold?

Tue, 06/26/2012 - 20:58 | 2563453 moonstears
moonstears's picture

I upped you. It's my understanding that a $100,000 Tbill is great collateral for a loan, to say, buy a burger chain, mining operation, toll highway...you get the picture. And lets take a moment to thank the Clintons for sharing all that technology w our buddies in China in the 90s, which they reverse engineer and knock off, using cheaper parts, to sell back to us. They're better robber capitalists than our guys.(and I am pro capitalism...no sarc...just sayin'). On this topic, maybe that's why Bernanke dreads deflation, you're too far in debt to buy, you(we) US scum, he ain't "scar'd oh us" but the PROC has ample purchasing power to take advantage of $500,000 mines and $250,000 McDonalds franchises in a deflationary spiral. He's in a rock and a fuckin' hard place, methinks inflation will prevail.

Tue, 06/26/2012 - 20:48 | 2563473 PrintingPress
PrintingPress's picture

gold, oil, houses, land, children whatever they want

 

Sat, 06/30/2012 - 11:51 | 2577031 SeniorD
SeniorD's picture

farmland, water rights and anything of real value...

Tue, 06/26/2012 - 20:31 | 2563406 knicks3005
knicks3005's picture

US is shitting BRICs

Tue, 06/26/2012 - 20:41 | 2563442 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

What if Europe bypassed the dollar?

Tue, 06/26/2012 - 23:27 | 2563887 potlatch
potlatch's picture

We have airbases for that, no worries mate.

Tue, 06/26/2012 - 20:50 | 2563480 Roscoe
Roscoe's picture

more like BRICs are shitting US...

Tue, 06/26/2012 - 21:06 | 2563519 Pladizow
Pladizow's picture

.

Wed, 06/27/2012 - 09:15 | 2564592 Think for yourself
Think for yourself's picture

I hereby nominate parent for best comment of the year.

Tue, 06/26/2012 - 20:31 | 2563409 dick cheneys ghost
dick cheneys ghost's picture

And now you know why the War Department has pivoted to the Pacific and wiill soon reopen the previously closed military bases....

Tue, 06/26/2012 - 20:35 | 2563424 bigkahuna
bigkahuna's picture

the war department will find that it is mistaken, about a great many thingsssssss

Tue, 06/26/2012 - 20:56 | 2563491 Manthong
Manthong's picture

Kind of hard to empire-build when your currency is confetti.. unless you have a strong enough military and just take the pure scorched earth, pillage and conquest route.

Tue, 06/26/2012 - 20:35 | 2563426 sunaJ
sunaJ's picture

Yes, that and a rise of Islamism in the Pacific Rim, but mostly to bolster old-world trade ideas.

Thu, 06/28/2012 - 15:39 | 2570548 mkkby
mkkby's picture

The war is already over, but I'm sure the idiot war department doesn't realize it.  Every fortune 500 company shipped thier plant to China.  We looted ourselves and gave it to them -- no, begged them to take it. 

What can the military do about it when they decide to nationalize the entire bundle and just laugh, saying here take back your green paper t-bonds and call it even?

Tue, 06/26/2012 - 20:32 | 2563412 CaptainObvious
CaptainObvious's picture

Aw, shit.  Looks like I have to spring for that Rosetta Stone Mandarin course after all.  And if the Gods of Irony are awake, it was manufactured in China.

Wed, 06/27/2012 - 00:32 | 2564030 DeadFred
DeadFred's picture

Da, I did that with Russian some decades ago, not perhaps my wisest decision.

On topic I wonder how much of this is for show to reinforce some back channel communications from Beijing to the Fed- any more QE and we're taking our ball and leaving the game. I don't buy the arguements that the Chinese are so invested in America that they won't rock the boat. That reasoning supposes that the Chinese think like Westerners, they don't. The rulers of the Middle Kingdom will be examining all the options for how they can move up the food chain during these exciting times and if a few hundred million of their people have to die so that they can become the alpha dog it won't even cause them to blink. The only thing that will matter is their evaluation of the probability of success (plus they won't want their own lives to be in jeopardy, thank you, please).

Wed, 06/27/2012 - 08:24 | 2564494 malikai
malikai's picture

Mostly true. I'll add that you'll know it's time when Chinese politicians and billionaires are selling their properties stateside. That's when you know their 'home instability' hedge is off and its game on.

Tue, 06/26/2012 - 20:33 | 2563414 Darth Silver
Darth Silver's picture

nothing to see here.  move along.

Tue, 06/26/2012 - 20:34 | 2563420 Seasmoke
Seasmoke's picture

there really is nowhere to run to and nowhere to hide.......holding gold and silver cant even stop what is coming

Thu, 06/28/2012 - 19:47 | 2571597 Jash
Jash's picture

I think what's coming is far and beyond worse than anyone can imagine. A time of trouble such as has not been seen since man was on the face of the earth.

Tue, 06/26/2012 - 20:36 | 2563429 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

While the world stared blankly at the Euro....

WHen a magician is doing a slight of hand trick, what does he do to get you to not see the trick?  He diverts your attention.....

Watch the Euro....

Tue, 06/26/2012 - 20:42 | 2563447 847328_3527
847328_3527's picture

I sold my house in 2008 and took a small hit (lost $56K) and bought lots of GLD and SLV....never once regretted it. The house has plunged $280,000 while slv has more then tripled and gld has more then doubled.

Poor Charlie Munger.....he must live on Alka Seltzers and Aspirin.

Sat, 06/30/2012 - 11:49 | 2577024 SeniorD
SeniorD's picture

Salute!

Enjoy your profits and stay healthy!

Tue, 06/26/2012 - 20:43 | 2563454 orangegeek
orangegeek's picture

USD is looking bullish.

http://bullandbearmash.com/index/usd/daily/

Best of luck to those countries who are leveraged on a communist currency.

Wed, 06/27/2012 - 03:27 | 2564246 Gief Gold Plox
Gief Gold Plox's picture

Technical analysis in the age of coordinated central intervention and microsecond resolution bots? Shit I got better luck getting laid tonight, and I've been married for ages.

Tue, 06/26/2012 - 20:44 | 2563456 Mr. Lucky
Mr. Lucky's picture

Not a peep in the nightly news.  All is well; the private sector is fine.

Tue, 06/26/2012 - 20:46 | 2563464 ich1baN
ich1baN's picture

Bold move 84.... I like it.

Tue, 06/26/2012 - 20:47 | 2563466 lolmao500
lolmao500's picture

China is still buying US debt like dumbasses.

Tue, 06/26/2012 - 21:57 | 2563652 moonstears
moonstears's picture

lol...see my comments on Tbills, they are Tier 1 collateral. This is why they keep buying them, you can borrow what, 95 cents on the dollar?

Wed, 06/27/2012 - 02:04 | 2564146 cranky-old-geezer
cranky-old-geezer's picture

 

 

see my comments on Tbills, they are Tier 1 collateral.

Not much longer.

USD became world reserve currency because (a) it was gold-redeemable at the time and (b) USA was the strongest manufacturing / exporting nation on the planet, insuring steady repatriation of USDs, maintaining woldwide demand for them.

Neither a nor b exist anymore.  No currency is gold-redeemable and China is the new strongest manufacturing / exporting nation on the planet, insuring steady repatriation of their currency, maintaining worldwide demand for it, while USDs flow out of America and flood the world, reducing their value. 

China exports real stuff.  Ok, it's cheap, but it's real stuff.

All we export now is government debt and inflation.

That factor alone guarantees diminishing USD dominance and rising Remimbi dominance (or Yuan or whatever), exactly what we're seeing. 

And there's nothing our military can do about this one, not with China and Russia being closely allied, it would be picking a fight with a giant and getting the shit beat out of ya ...in a thermonuclear asswhoping possibly.

Don't bitch at China, go bitch at our own leaders for (deliberately?) destroying America's manufacturing base and borrowing $150 billion a month now to make up for falling tax revenue ...because they destroyed our manufacturing base ...sent it to China by the way.

China isn't destroying America's economy.  Our own government is destroying America's economy ...and our currency.  They couldn't do a better job of it if they were trying to ...which makes me believe they are.

Don't worry about Yuan or Remimbi becoming WRC. 

Worry about USD losing that status.  That's when we're really fucked.

Going around in some fantasy that USD will always be WRC because it has always been WRC (long as you've been alive anyway), is just plain arrogant, and arrogant is dumb.

Wed, 06/27/2012 - 10:51 | 2565003 SamuelMaverick
SamuelMaverick's picture

Loss of reserve currency status = epic fail = wipeout for the poor and middle class in the formerly great USA.   This sucks ass.

Tue, 06/26/2012 - 20:48 | 2563467 johnnymustardseed
johnnymustardseed's picture

Just add some Chinese symbols to the dollar under George Washington and we will be set to go..... ? ? ??  and maybe say something like IN CHINA WE TRUST

Tue, 06/26/2012 - 20:48 | 2563472 XtraBullish
XtraBullish's picture

My dog makes $84/month delivering papers.

Tue, 06/26/2012 - 21:17 | 2563546 rosiescenario
rosiescenario's picture

"A frieend's mother makes $84 hourly on the computer."

 

..note to self: send dog back to grad school......

Tue, 06/26/2012 - 20:59 | 2563505 disabledvet
disabledvet's picture

Well how the hell else was I going to start buying the 100 billion in Chinese muni debt now that the whole market was banned by the Government in Beijing? I mean that's just for this year alone and for one City! So i did what the boss told me to do. You got a better idea?

Tue, 06/26/2012 - 21:03 | 2563513 FieldingMellish
FieldingMellish's picture

all without mentioned the world "dollar."

 

Tyler... your editing sucks balls.

Tue, 06/26/2012 - 21:32 | 2563577 Roscoe
Roscoe's picture

FM, you may be a prolific poster, but your being here for only 6 weeks and 2 days makes you awfully impudent and rude to insult our host who graciously provides a banquet of nourishing information each day. I think it's your manners that "sucks balls" sir!

Tue, 06/26/2012 - 21:35 | 2563587 FieldingMellish
FieldingMellish's picture

Just pointing out the truth. The article is great but the editing errors can make things an irritating if not confusing read.

Tue, 06/26/2012 - 21:45 | 2563613 earleflorida
earleflorida's picture

wasn't that ya oft spoke... twas it mr purfict

Tue, 06/26/2012 - 22:36 | 2563761 FieldingMellish
FieldingMellish's picture

all without any mention of the word "dollar."

 

Much better, Tyler. Thanks for fixing it.

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