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The USD Trap Is Closing: Dollar Exclusion Zone Crosses The Pacific As Brazil Signs China Currency Swap

Tyler Durden's picture




 

When the US Dollar is ultimately dethroned as the world's reserve currency (and finally gets rid of all those ridiculous three letter post-Keynesian economic "theories") nobody will have seen it coming. Well, nobody except for the following headlines: ""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." And while the expansion of the "dollar exclusion zone" was actually quite glaring to anyone who dared to look, one thing was obvious: it was confined to Asia. No more courtesy of the following FT headline: "Brazil and China agree currency swap." More: "Brazil has provided a vote of confidence in China’s efforts to promote the renminbi as a reserve currency by becoming the biggest economy yet to agree a swap deal with Beijing. Brazil and China announced the R$60bn (US$29bn) local currency swap after a bilateral meeting between Wen Jiabao, the Chinese premier, and Dilma Rousseff, Brazil’s president, on the sidelines of the Rio+20 environmental summit in Rio de Janeiro."

“It is a measure that reinforces the economies of both countries,” Guido Mantega, Brazil’s finance minister, said late on Thursday night.

Well, that... and also a measure which shows that one by one every country in the world is starting to think of the post-dollar world.

China has launched an aggressive campaign of “currency swap diplomacy”, signing about 20 such agreements over the past four years with countries ranging from Argentina to Australia and the United Arab Emirates.

 

While these have been largely symbolic – only Hong Kong so far has had to activate its swap line after a shortage of renminbi in the territory in 2010 – they are seen as helping the long march of the internationalisation of the Chinese currency.

They are inactive only as long as they are not activated. And that, as the Federal Reserve bank of JPMorgan the United States has shown can be done with just the flip of a switch.

What happens next is usually best summarized by the following chart which has long been one of our favorites.

 

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Fri, 06/22/2012 - 08:26 | 2550314 doomandbloom
doomandbloom's picture

Basket of Currencies,  S'il vous plait

Fri, 06/22/2012 - 08:31 | 2550334 old naughty
old naughty's picture

The US still have time...Its bar is not as long as Spain, France, and UK yet.

Ignore Portugal and Netherlands, too small, the US does not "need" them.

Fri, 06/22/2012 - 08:46 | 2550390 falak pema
falak pema's picture

I'm sure Christine Lagarde has an angle on this; a leg in both camps, she is open to finding herself doing the great splits as the grand canyon yawns below.

I'd hate to be in the folds of her skirts looking up at the financial world towering above me like a colossus on feet of clay!

Wow, what a view...Medusa was not a joke after all!

Fri, 06/22/2012 - 09:51 | 2550686 FEDbuster
FEDbuster's picture

The United States economic collapse will not be a one day event. Many holes will appear in the dam prior to the flood, this is just one more hole. 

Fri, 06/22/2012 - 10:02 | 2550741 Clint Liquor
Clint Liquor's picture

Ponzi schemes have two charateristics: One, they go on much longer than you would think possible. Two, they collapse much quicker than you would think possible.

Fri, 06/22/2012 - 09:27 | 2550554 Baron Robber
Baron Robber's picture

falak, that visual was uncalled for.....jarred my morning

Fri, 06/22/2012 - 09:35 | 2550591 falak pema
falak pema's picture

apologise for the look in the mirror...Perseus always carried it on him, his shiny blade or shield. 

Fri, 06/22/2012 - 09:30 | 2550569 Karl von Bahnhof
Karl von Bahnhof's picture

Ahh... see words like "Lagarde" "legs" and "open" doesnt make my day...

Fri, 06/22/2012 - 09:15 | 2550485 Stock Tips Inve...
Stock Tips Investment's picture

At the end of the day, a currency becomes global reserve depending on the leadership that can show its economy. If an economy is strong in time, currency enjoyed that privilege. There will always be countries that want to get out of that scheme. But only succeed if the country's economy more importantly, lose international confidence.

Fri, 06/22/2012 - 09:39 | 2550605 Temporalist
Temporalist's picture

At the begging of the day they should put people who say "at the end of the day" into stockades and beaten mercilessly with wet Spiderman towels until the end of the day.

Fri, 06/22/2012 - 08:33 | 2550343 Silver Shield
Silver Shield's picture

The Rise of the Anti Hegemon

http://youtu.be/GsWiaK0BSQo

Fri, 06/22/2012 - 09:14 | 2550479 SilverTree
SilverTree's picture

+1

This comment resonates with me.

Fri, 06/22/2012 - 09:48 | 2550665 JPM Hater001
JPM Hater001's picture

I endorse the watching...Long time subscriber to the channel.

Fri, 06/22/2012 - 14:45 | 2551979 pupton
pupton's picture

Hey Silver Shield, are you Chris Duane?

Fri, 06/22/2012 - 08:50 | 2550407 Peter Pan
Peter Pan's picture

Sooner or later we will realise that what we are dealing with is NOT a basket of currencies but a BASKET CASE of currencies.

All this talk of China entering the reserve currency fold is just another wrong turn on the road to resolving the world's economic problems.

The US dollar has done enough damage, do we really need the Chinese Yuan to extend that damage?

 

Fri, 06/22/2012 - 09:27 | 2550553 Dr. Richard Head
Dr. Richard Head's picture

Since the US Government has been so kind in exporting trillions of dollars in inflation to China, me thinks they are considering showing their thanks. 

Will Toledo, Ohio Be The First Major American City To Be Owned By China?

http://world.hawaiinewsdaily.com/2012/06/will-toledo-ohio-be-the-first-major-american-city-to-be-owned-by-china/

Fri, 06/22/2012 - 08:54 | 2550423 tiger
tiger's picture

Allow the banksters the control of any money and........ voilà!

Fri, 06/22/2012 - 11:09 | 2551103 rotagen
rotagen's picture

It's OK we got Hope and Change, or is it dope and laundry change?

Fri, 06/22/2012 - 08:26 | 2550315 achmachat
achmachat's picture

anyone knows if the SWIFT system still is officially a USD backed system?

Fri, 06/22/2012 - 08:29 | 2550326 resurger
resurger's picture

Are they creating a new Asian "SWIFT" system to circumvent USD? If yes when will they implement it?

IF anyone has an idea, kindly share .. thnx

Fri, 06/22/2012 - 08:46 | 2550392 Broomer
Broomer's picture

I spent a couple of minutes searching and I only found this:

http://presstv.com/detail/2012/05/26/243243/iran-designs-alternative-swift-cbi/

It only says Iran has something already in place, without giving details.

Fri, 06/22/2012 - 09:44 | 2550631 Temporalist
Temporalist's picture

Gold

Fri, 06/22/2012 - 13:25 | 2551714 cranky-old-geezer
cranky-old-geezer's picture

 

 

Yes, financial oligarchs at the worldwide level are letting America's leaders' insane hubris push them right into forcing another SWIFT style system to be developed among asian nations rebelling against America's insane oil embargo of Iran.

Yes, America's insane leaders are forcing the rest of the world to develop a SWIFT alternative that will result in the end of the US dollar as world reserve currency.

America's leaders are so caught up in their insane arrogance they can't see what's happening or refuse to accept what's happening.

USD's ultimate collapse won't come from printing.  It will come from rejection as a trading currency by the asian bloc of nations.

You won't see this development on any financial chart.  USD will appear strong on financial charts right up to the day it is officially dropped by the entire asian bloc of nations and other subscribing nations like Brazil.

 

 

Fri, 06/22/2012 - 08:26 | 2550318 Fips_OnTheSpot
Fips_OnTheSpot's picture

U NOT SWAP!!!

Fri, 06/22/2012 - 08:26 | 2550319 resurger
resurger's picture

+5

Fri, 06/22/2012 - 08:27 | 2550321 mrktwtch2
mrktwtch2's picture

yeah right the yaun which isnt even freely traded is going to become the reserve currency?? i guess we will see flying pigs as well..who comes up with this stuff?? ..lol..rmemeber folks the world need the usa the usa does not need the rest of the world..

Fri, 06/22/2012 - 08:34 | 2550347 Snidley Whipsnae
Snidley Whipsnae's picture

mrktwtch2... Are you long pom poms and flags? lol

Fri, 06/22/2012 - 08:48 | 2550401 tocointhephrase
tocointhephrase's picture

rotflmao

Fri, 06/22/2012 - 08:35 | 2550350 Burr's 2nd Shot
Burr's 2nd Shot's picture

I believe that you should get a super cool avatar so that everyone can tell you are trolling.  Otherwise, folks might think you actually believe such drivel.

Fri, 06/22/2012 - 08:36 | 2550351 sumo
sumo's picture

"the world need the usa the usa does not need the rest of the world.."

Of course. The US is self-sufficient in oil, and has a self-sufficient manufacturing sector. Its finance sector is the eight wonder of the western world. Empires last forever, just ask the Brits. In the immortal words of Timmy The Great, "no risk".

 

Fri, 06/22/2012 - 08:40 | 2550371 AnAnonymous
AnAnonymous's picture

An extorter needs the extorted more than the extorted needs the extorter.

On the necessity for the extorter to keep the extortion job up.

Fri, 06/22/2012 - 09:18 | 2550500 Mitzibitzi
Mitzibitzi's picture

Hey! You made a valid point there. Better watch that, you know; Big Brother is apt to be keeping tabs on you and is sure not to like it if you get too pally with the Western Capitalist Scum you're paid to berate.

Fri, 06/22/2012 - 09:19 | 2550508 zapdude
zapdude's picture

You beat me to it by < 60 seconds!

Fri, 06/22/2012 - 12:48 | 2551590 AnAnonymous
AnAnonymous's picture

Big Brother is apt to be keeping tabs on you and is sure not to like it if you get too pally with the Western Capitalist Scum you're paid to berate.

____________________________

Made me laugh. US citizens are fond of exagerating their self importance.

Not the case for everyone though.

There is no big brother as you imply. People in power do not waste their time on non threats. They prefer to allocate their time on tackling existential threats (which nobody on this site is) and enjoying life.

Quite a hard fact to admit for US citizens who throat the idea they favour freedom of speech.

Fri, 06/22/2012 - 09:19 | 2550504 zapdude
zapdude's picture

Shocking.  Your comment actually makes sense for once, and you didn't even use your usual "US Citizenism" or "blobbing up" retarded non-words.  I can almost give you a +1 for improvement.  Almost.

Fri, 06/22/2012 - 12:45 | 2551566 AnAnonymous
AnAnonymous's picture

As if was hanging to your appreciation.

US citizenism is moving, with or without you. All that I need is US citizenism to express itself.

And you cant prevent that so...

Fri, 06/22/2012 - 12:57 | 2551625 akak
akak's picture

The only thing "moving" in regards to you is your bowels, as you continue to dump your foul digested-dog shit all over this forum, much as you do on your Chinese roadsides.

Sat, 06/23/2012 - 08:03 | 2553370 Redhotfill
Redhotfill's picture

Yes!  We need time machine to go back in to to just before the Fed was created and that would be the case.

Fri, 06/22/2012 - 08:35 | 2550352 resurger
resurger's picture

Complacency is a true bitch

Fri, 06/22/2012 - 14:30 | 2551834 earleflorida
earleflorida's picture

"9-11" ???

Default back to the Gold Standard,... "The Liquidation of Government Debt"      http://www.imf.org/external/np/seminars/eng/2011/res2/pdf/crbs.pdf

Fri, 06/22/2012 - 08:37 | 2550357 Global Hunter
Global Hunter's picture

doesn't have to mean yuan is the collatoral behind their banking system, can be anything they like to settle financial transactions gold, copper, iron ore etc.

Sat, 06/23/2012 - 08:06 | 2553372 Redhotfill
Redhotfill's picture

Settlements in 9mm, 5.56 Nato or 308 Nato   that would work,  and be universally accepted.

Fri, 06/22/2012 - 08:39 | 2550363 Broomer
Broomer's picture

Yes, it isn't freely traded.

But the future is about using gold for reserves, and currency as, you know, currency, for trade.

Fri, 06/22/2012 - 08:45 | 2550387 oleander garch
oleander garch's picture

What makes you think this is the Olympics?  The vast geography of Asia offers many delightful spots for timocratic enjoyment with far more advanced police states dedicated to the careful protection of the fabulously wealthy.  From up high, the world is tiny.

Fri, 06/22/2012 - 08:49 | 2550398 dwdollar
dwdollar's picture

Haha... and the USD exchange rates aren't manipulated?

Fri, 06/22/2012 - 08:51 | 2550415 hnaparst
hnaparst's picture

Actually, you're correct.  A currency that is not freely convertible is not eligible to be a reserve currency.  One would also need a functioning legal system and a long history of prudent central banking.  The Chinese are showing progress on this last point, but they need more history.  The legal system and convertibility are show stoppers right now.

Fri, 06/22/2012 - 09:17 | 2550494 Spastica Rex
Spastica Rex's picture

The US military is the show stopper right now.

Fri, 06/22/2012 - 13:32 | 2551731 cranky-old-geezer
cranky-old-geezer's picture

 

 

Until someone plays the thermonuclear card and America folds.

Fri, 06/22/2012 - 14:15 | 2551848 AustriAnnie
AustriAnnie's picture

As long as the world will accept dollars for oil.

Takes a lot of oil to keep that military machine going....

Fri, 06/22/2012 - 09:36 | 2550595 ITrustMyGut
ITrustMyGut's picture

in a lawless world... your points are built squarely on a very soft, sandy, fluid foundation..

there is NO rule of law.. ANYTHING is possible. PERIOD.

Fri, 06/22/2012 - 10:01 | 2550735 laomei
laomei's picture

It's great as far as controlling risk goes.  Fluctuations are not massive and it's far more stable.  No one at the whims of speculators beyond trading within a set band of +/-1% per day.    The world doesn't need the US, sorry.

Fri, 06/22/2012 - 11:35 | 2551250 Iwanttoknow
Iwanttoknow's picture

Possible.But does it need China?

Fri, 06/22/2012 - 14:21 | 2551871 AustriAnnie
AustriAnnie's picture

China is sitting on top of a hell of a lot of natural resources.

So, yes.  (Especially if cooperation between China and other resource-rich countries exists, the world will need to stay on China's good side in order to have access to those resources.)

Fri, 06/22/2012 - 08:30 | 2550332 EscapeKey
EscapeKey's picture

Evidently bullish for US equities.

Fri, 06/22/2012 - 08:30 | 2550333 No Euros please...
No Euros please we&#039;re British's picture

Apart from the stupid name, the renminbi would have more chance if it was backed by gold. But I guess that would mean China would be buying up gold right now? Right?

Fri, 06/22/2012 - 08:44 | 2550382 sumo
sumo's picture

Or if it wanted to be sneaky, China would be making mine off-take deals, so that the gold ore goes straight to a refiner and then to SAFE, then flipped to the PBoC, and all along the gold never appears on the bullion market, so London never knows that the real volume is.

Lucky for the Fed the Chinese are open and transparent, avoid long-term planning, and don't like gold ... yes indeedy.

Fri, 06/22/2012 - 09:24 | 2550537 Mitzibitzi
Mitzibitzi's picture

That would require armed merchant ships to transport the stuff. Like, for example, the ones the China Ocean Shipping Agency reputedly just finished fitting out. Apparently carry armed guards too, against the threat of Somali pirates.

Sat, 06/23/2012 - 08:11 | 2553377 Redhotfill
Redhotfill's picture

I can see the headline now,  Somoli Pirates Hi-jack Chinese frieghter full of gold,  demand $xxxxxxx USD  for safe return lol. 

Fri, 06/22/2012 - 08:31 | 2550335 TrainWreck1
TrainWreck1's picture

Obama's Harvard intellect wll see us through this crisis!!!

Fri, 06/22/2012 - 08:33 | 2550344 AnAnonymous
AnAnonymous's picture

US citizenism shows the way.

Fri, 06/22/2012 - 08:41 | 2550376 Sophist Economicus
Sophist Economicus's picture

AnAnonymous, you've been here long enough to treat yourself to an avatar.   Perhaps one of a US Citizenism?

Won't your hive allow you just a little individual expression?

Fri, 06/22/2012 - 12:52 | 2551598 AnAnonymous
AnAnonymous's picture

A little individual expression? What does this mean?

The appearance, not the substance huh?

US citizens keeping selling the idea that individuality is made through ornamental additions.

But hey, it is good for business, it is good for marketing, it is good for consumption.

Keep looking for that little outside sign that should make you feel like the individual you are not.

For US citizens, the group is all.

Fri, 06/22/2012 - 13:12 | 2551668 akak
akak's picture

The world according to AnusAnonymous:

Chinese Communist totalitarianism = good

Every minute aspect of the United States and/or its citizens = bad

 

The world according to reality:

AnusAnonymous = Insanitation, monolizing the speeching means, offuscation, algebraic coconut hobnobbery, and general blobbing-up.

Fri, 06/22/2012 - 18:27 | 2552653 Poor Grogman
Poor Grogman's picture

Tibetan individuality not wanted in PRC neither any independent thought or philosophy. Just do as told and no one will get organs harvested.

Fri, 06/22/2012 - 09:24 | 2550536 zapdude
zapdude's picture

Boo, aaaand you've blown it.  It looked like you were trying to reform yourself -- see my comment above.  Nevermind, you're still a robotic troll in a Shanghai internet cafe.  -1

GO AWAY, AND NEVER COME BACK!  -- Gollum

Fri, 06/22/2012 - 09:28 | 2550557 Mitzibitzi
Mitzibitzi's picture

Beat me this time, Zap.

 

Sigh, just when you think the shill-bot might be aquiring some sentience after all....

Fri, 06/22/2012 - 10:39 | 2550913 zapdude
zapdude's picture

He is SkyNet's retarded cousin -- an abandoned community college science project the Chinese gov't bought to pathetically harass and attempt to derail intellectual discourse amongst us learned bretheren here on ZH.  I hope someday the janitor at the Shanghai internet cafe trips over his cord and unplugs him, and then promptly forgets to plug him back in.  Until then, we are mildly plagued with his semi-coherent insults.

Fri, 06/22/2012 - 12:36 | 2551500 akak
akak's picture

ROR!

("Raughing out roud!")

 

Indeed, the laughable efforts of Comrade Dishwasher to derail every discussion here into a Long March of insanitation by monolizing the speeching means and blobbing-up every conversation with his offuscating algebraic coconuttery of "US Citizenism" are much like the innumerable piles of Chinese roadside feces: stinky, omnipresent, difficult to avoid, and disgusting once stepped into.

Fri, 06/22/2012 - 12:55 | 2551616 AnAnonymous
AnAnonymous's picture

the Chinese gov't bought to pathetically harass and attempt to derail intellectual discourse amongst us learned bretheren here on ZH.

_____________________

Made me laugh. The Chinese are on the path to affluency if they are looking for useless projects just to consume and consume.

Derail the intellectual discourse among US citizens?
Best way? Let's them talk. No intervention, you might improve it.

US citizens require nobody to derail an intellectual discourse. They are perfectly self sufficient and the best solution for it.

Fri, 06/22/2012 - 13:11 | 2551657 akak
akak's picture

We don't give a shit what "makes you laugh".
(apparently, just about everything)

Just tell us what the fuck would finally make you go away.

Sat, 06/23/2012 - 08:08 | 2553374 Poor Grogman
Poor Grogman's picture

The Chinese are on the path to affluency Tibet was good start but no rescources yet, we kreep drigging till find somting then give generous chinese citizenism to whatever remains of formerly peaceful unarmed non rescouce consuming Tibetan people.

Fri, 06/22/2012 - 08:41 | 2550374 Global Hunter
Global Hunter's picture

and some economic intellect from Columbia and Princeton

Fri, 06/22/2012 - 08:32 | 2550338 earnulf
earnulf's picture

Got Gold?   Got Silver?   Got Physical?

Fri, 06/22/2012 - 08:50 | 2550409 monad
monad's picture

Got lead?

Fri, 06/22/2012 - 08:50 | 2550411 tocointhephrase
tocointhephrase's picture

If not, you better have a good product or service to offer!

Fri, 06/22/2012 - 09:11 | 2550471 serog
serog's picture

soap making?

Fri, 06/22/2012 - 08:35 | 2550339 Abraxas
Abraxas's picture

Orderly withdrawal of US$ as a reserve currency and US as a global power # 1. What is to replace US$? SDRs, gold, other currencies, or a combination.

But more importantly, what or who is to replace US as #1? I'm out of guesses.

Fri, 06/22/2012 - 09:38 | 2550594 Abraxas
Abraxas's picture

Lots of downticks. Perhaps I was misunderstood. I’m not saying that the US will always be the global superpower, nor that I like it (not a flag-waver). I’m honestly posing a question as to who will succeed US on the throne. China? Russia? Perhaps the downtickers can offer some guesses.

Fri, 06/22/2012 - 09:39 | 2550608 ITrustMyGut
ITrustMyGut's picture

most likely.. a new.. central super power more likely , than any soverign we can name..

Fri, 06/22/2012 - 09:42 | 2550624 Abraxas
Abraxas's picture

I believe I see what you're getting at. Thanks.

Fri, 06/22/2012 - 13:42 | 2551756 cranky-old-geezer
cranky-old-geezer's picture

 

 

I'm not one of the downtickers, I don't do any up nor down ticking actually, but my response to your question is not one nation rather a consortium of nations with the generic label A.N.A.  It's coming, get ready for it.

Fri, 06/22/2012 - 14:39 | 2551953 AustriAnnie
AustriAnnie's picture

It seems you expect the replacement to the USD to be orderly and planned.  Like an official declaration of a new reserve currency will be declared in some meeting room.

The fact is, it does not need to be so.  The reserve currency that rises up will be whatever people/nations are willing to accept.  If more and more nations are accepting food-for-gold, oil-for-gold, and other resources-for-gold, then gold will be the center of the exchange and currencies offering currency-for-gold (gold backing) will be considered premium.  It doesn't have to be one currency, as long as there is gold at the center.

Whatever is perceived as a store of value will prevail.

And if a gold-backed currency prevails, then eventually politicians will see the benefits of going off the gold standard and printing their way to Empire.  And we do this all over again.  And again.

Fri, 06/22/2012 - 08:32 | 2550342 carefreemanjoe
carefreemanjoe's picture

Seems like act 7 (arbitrary number) of a sinister plot for world domination and hegemony.

Fri, 06/22/2012 - 08:34 | 2550346 SeverinSlade
SeverinSlade's picture

The dollar is the world's oldest currency.  It has been money for 5000+ years.  Oh wait, I'm talking about gold.  Fuck.

Fri, 06/22/2012 - 08:39 | 2550367 EscapeKey
EscapeKey's picture

Really? Could have fooled me. Every time I hear Keynesians refer to "history" it involves the "US Dollar ALWAYS having been the safest asset".

Fri, 06/22/2012 - 08:48 | 2550403 TrainWreck1
TrainWreck1's picture

I'm thinkin sex* has been currency longer than gold

 

*not necessarily with women in certain cultures

Fri, 06/22/2012 - 08:59 | 2550433 SeverinSlade
SeverinSlade's picture

That joke was a TrainWreck.

Sat, 06/23/2012 - 08:18 | 2553381 Redhotfill
Redhotfill's picture

Is that how the word  "Grexit" came about

Sat, 06/23/2012 - 08:18 | 2553382 Redhotfill
Redhotfill's picture

Is that how the word  "Grexit" came about

Fri, 06/22/2012 - 10:02 | 2550746 LouisDega
LouisDega's picture

At least 7-11 and my local liquor store still regards the $$ as a safe asset. All good

Fri, 06/22/2012 - 11:11 | 2551110 viahj
viahj's picture

so, you're saying that their prices haven't increased at all over the past few years?

Fri, 06/22/2012 - 08:37 | 2550358 AnAnonymous
AnAnonymous's picture

Again the same scam but this time with volumes which allows to decide over the issue.

The trouble is USD is needed by a society for every day needs.

USD is acquired from the US of A, directly or indirectly.

USD a secondary currency for some other deals actually helps to preserve the amount of USD you receive from the US.

USD decline could start when you can no longer buy in USD.

Not when countries, people are switching to other currencies for minor deals in order to preserve their USD reserves to be used on more vital goods.

This kind of deals only show the strength of the USD, not a weakness.

Fri, 06/22/2012 - 08:56 | 2550417 i-dog
i-dog's picture

Ahhh ... my little slow-pedded friend ... I beg to differ. When the $888 trillion (that's a lucky number I pulled out of my ass, just as the real number sloshing around has been pulled from the Bernank's ass) finds its way back into the US economy  -- because nobody else wants to use them for global trade settlements -- then somebody is going to have to either burn them (eating a massive loss) or circulate them (ramping up hyperinflation).

Neither of those outcomes would be too healthy for the US economy (though, in the second case, US workers might be able to hang onto a government-mandated minimum wage of $50/hour for flipping burgers).

Fri, 06/22/2012 - 12:41 | 2551545 AnAnonymous
AnAnonymous's picture

Beg to differ on what? A hypothetical?

For the moment, nations holding USD look more as they were preserving them.

On a side note, the US of A defines the USD. Changing the definition of the USD before the amount of USD floating around outside the US is about to flow back is not only possible but also fruitful.

Fri, 06/22/2012 - 13:22 | 2551709 akak
akak's picture

Griggly, dry the snortle, frangly youpin?

Fri, 06/22/2012 - 14:53 | 2552015 AustriAnnie
AustriAnnie's picture

"US of A defines the USD"

Riiiiight.

Wrong. The rest of the world defines the REAL VALUE of the USD through the degree to which it is willing to exchange goods for the USD.  "Full faith and credit"

When the faith diminishes the credit line gets cut off.  The definition of the dollar is determined by global market actors.  Try telling someone: "I'm re-defining the USD to be equal to an ounce of gold", and try getting someone to give you an ounce of gold for a dollar.  They would only do this if they had faith that tomorrow you would give them the gold ounce back for a dollar.  If there is no faith that the gov't will hold to this exchange rate, then the exchange rate does not exist.

Fri, 06/22/2012 - 09:02 | 2550444 sumo
sumo's picture

"The trouble is USD is needed by a society for every day needs"

USD is needed internationally mainly because the Saudis made a deal with the US to sell oil only in USD.

If the Saudis threaten this arrangement, the US will invade KSA. While the Saudis go along, they get state-of-the-art military support and hardware. An easy choice for KSA.

Fri, 06/22/2012 - 09:26 | 2550547 Snidley Whipsnae
Snidley Whipsnae's picture

"While the Saudis go along, they get state-of-the-art military support and hardware. An easy choice for KSA."

The KSA has always pursued a policy of maintaining a weak military... The purpose of this policy is obvious; prevent the overthrow of the monarchy by the military.

KSA depends on the USA for their primary military protection.

Fri, 06/22/2012 - 12:57 | 2551624 AnAnonymous
AnAnonymous's picture

USD is needed internationally mainly because the Saudis made a deal with the US to sell oil only in USD.

_______________________

An important bit but USD hegemony can not be sumed up to that.

It is based on every essential as society requires to exist. That is what is bought in USD.

Fri, 06/22/2012 - 13:20 | 2551651 akak
akak's picture

Hey, I can play that game too!

 

Sun spramp the glittered volume cakes! 

Demons leap benignly in strap knowing the formica.

Every then and how ant cafe keeps telling red.

Blind calendar!

Limpid mountain!

US Citizenism!

Sat, 06/23/2012 - 07:59 | 2553367 Poor Grogman
Poor Grogman's picture

Tibet is needed by chinese citizen mainly because air is still breathable.

Future profits assured for communist party citizens if fresh air can be somehow shipped to ghost cities on mainland.

Fri, 06/22/2012 - 08:37 | 2550359 fonzannoon
fonzannoon's picture

2100 is so far away.  I was thinking more like 2013.

Fri, 06/22/2012 - 08:39 | 2550362 sumo
sumo's picture

Right-thinking PhD-brainy Econo-tards agree: no-one saw this coming.

Fri, 06/22/2012 - 08:48 | 2550364 falak pema
falak pema's picture

ringa ringa roses...the Brics have a pocket full of posies and it ain't grown in the killing fields of poppies feeding the greenbacked factory of roller-bladed-our-money-your-problem type of monetary mayhem chow fodder; financialised, derivative bitten, white powder sauced coleslaw. 

Whew that was a mouthful of hegemonial fiat money now available for all and sundry as toilet rolls.

Fri, 06/22/2012 - 08:45 | 2550386 Debtless
Debtless's picture

Dollar goes up any more against the current ill-weighted basket of others and US co. earnings start whining. And our overlords cannot have that. 

I think it's a decent bet to pick up some more phyz Pms while they're on sale here. When the big inflate comes, it comes rather quickly. See history.

Fri, 06/22/2012 - 08:46 | 2550389 Vendetta
Vendetta's picture

I guess its time to invade.

Fri, 06/22/2012 - 08:54 | 2550426 azzhatter
azzhatter's picture

watch for the headlines that brazil is harboring terrorists

Fri, 06/22/2012 - 09:18 | 2550503 sumo
sumo's picture

I envy the drone operators who get to check out Copacobana beach with high-definition image capture.

 

Fri, 06/22/2012 - 08:46 | 2550393 hnaparst
hnaparst's picture

If this were serious analysis, it would go back another 2000 years.  How can we believe short-term analysis?

Fri, 06/22/2012 - 08:47 | 2550395 Everybodys All ...
Everybodys All American's picture

Bernanke is responsible for this just as he is responsible for the US losing the AAA credit rating. Why has Obama kept him on? Does he want to destroy this country because if he does this is as good a way of doing it as you will find?

Fri, 06/22/2012 - 08:55 | 2550427 Turin Turambar
Turin Turambar's picture

There's plenty of blame to go around.  Right Greenspan?

Fri, 06/22/2012 - 11:40 | 2551271 Iwanttoknow
Iwanttoknow's picture

I'll take the blame.

Fri, 06/22/2012 - 09:46 | 2550648 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Bernanke and Obama are both puppets of the New World Order!!!!!!!  Haven't we figured that out yet!?

Fri, 06/22/2012 - 08:51 | 2550413 Alpo for Granny
Alpo for Granny's picture

Ok help out a newb here. I am just getting into the first chapter of Currency Wars so maybe it wil explain everything. So if China backed its yuan (or a bric dollar) in gold, that means it would strenghten and stabilize. And if it strengthened, their citizens would instantly have more purchasing power because commodities and raw material prices (and by extension everything else) would go down for them. But this new strong dollar would kill their exports but they could now produce and sell to themselves and the other Brics if the other brics are on the same dollar. The USD would drop so the value of their reserves and holdings of UST's would plummet. So it would be a zero sum game of sorts except they would be free from the US exporting their inflation and also free of their control with the SWIFT system.  Also their citizens would be happier and more content and they would avoid insurrection/riots/etc. that might happen if inflation keeps increasing there.But I would imagine that they would start importing drones and other us military apparatus..not by choice either..

How off base am I here?  What would this do to the value of PM's here in the US? Or is it more likely the US would have to climb on this gold/commodities backed currency? Has the Alpo finally worked its way through the blood brain barrier?

Fri, 06/22/2012 - 09:42 | 2550546 TK69
TK69's picture

Most currencies books are worthless and most people ahve no clue what they are talking about.  It acutally is very simple.  Just understand this and you will understand the word.

Central run economies cannot exist left to their own devices.  Why?  Because of deminishing returns.

China is an mercantile economiy. And as such, Monopoies destroy innovation and creativity in order to protect themselves from competition.  If not the case, people could build their own wealth and create their own power.

You see, competition creates Innovation and creativity which in turn creates higher standards of living.  Monoplies do the opposite so as cost rise over time (dimising returns) they raise prices and create inferrior products.  And the chepaer the money is better for them because it means more exports. And means jobs for their unions and corporate friends.  It also means it is easier for them to collect taxes.  This is why most of the world are mercantile economies.  It is mutually beneficial, not to mention prosperous, for them.

However, going back to a gold standard whould mean that they could not print money which would erode their power bases, deplete their savings, and subject them to competition.  So, they create regiulations to product those "important" businesses who export products to other nations with people who have "usefull" money.  In this way they keep their power in tact. And when they export things to the us to get us dollars, which means that they can by us goods. Afterall very few people produce anything of vaule in their countries. Byw, money can be anything and should be that two or more parties aggree to.  It used to be tobacco here in the early colonies.

ANd Us dollars are used for eveything in global settelments because all other currencies are far worst.  Not becasue of preferrence.  These currencies were created in order to create artifical borders so that those people who rule the government also rule over money that eveyone must use.  Fiat CUrrencies are only a tool to enslave the masses.

SO, countries like egypt riot beacuse they do not export anything of substantial value and as such do not have access to US dollars which means they cannot buy US food.  And as such thier population starves while the rulers who control the reasurces do sell enough assets to get enough dollars to by their own food ans weapons.  Weapons are sold in US dollars too.  ANd as such they contine to debase their own currency so that they can continue to get US dollars because they are not effected.  THis is why so much financial aid is given to them.

It is cheap and easy to print money.  you dont have to produce anything and you can make your currency cheaper.  But as money gets cheapened so does everything else (priced in that money) so that it gets expoert.  

Very few people in the rest of the world acutally produce anything if value which is why US goods are in such high demand.  BUt again this means that these countries need us dollars. SO the chinese can sell things to get us dollars and than buy US goods including treasuries.  SO, it is actually a subsidy for the US consumer.  It creates jobs, lower prices, and buys trearues which is used to pay for social spending.  BUt it creates misory for teh average chinese peasent.

 

Fri, 06/22/2012 - 09:04 | 2550421 TK69
TK69's picture

Lol.  Good luck with that.  

Neither of these countries are acutually self sufficient or even in solvent.  They both creat money out of thin air to support their economies.  SO, it is all aritifical.  OF course the US does this too but for the most part this has been driven by loans allowing production to increase while blaming the resulting strife on their twisted verton of competition and capitilism.

 ANd replacing the US dollar?  Really, please.  

These so called leaders may wine and cry about us dominance but all these leaders are also schooled upon keysinen eonomics which means they do not have a clue about what creates economies.  For them, it is the top down.  In reality it is just the opposite.

And even as they try to force their populations to abandon the dollar ans set such polices to satify their own egos and to say to others that they matter too, those who do have wealth will flock to the dollar, not commodiitees for protection.  ANd so will their leaders. 

 Why?  Because they know that ending fiat money means the end of their power base, money, and their connections in which they derive their wealth.  They will have to compete and this they cannot do.

NO, the end of the dollar will come from the realization of the economic lie people have been living.  It iwll come formt he bottem to the top.  IT willl come because to few people are able to produce whether because of lack of ambition, demand, or over zelous regulations.  

With no more production there are no more reasons for loans.  And without loans there is no monetary inflaition which allows additional tax revenue to be collected in order to support social welfare benefits and political causes.  The problem is systemic.  

Without enough people borrowing enough money to inflait the money supply, the worlds economies cannot be sustained.  Of coiurse these leaders will continue to print money in a vain effort to tell others that at least they are doing something.

The whole world is myird in artifical monopolies of various sorts which create wealth destruction politices.  They are self defeating.  At some point it aways catches up.  Soon not even the elite will be able to escape from reality.

Central run governments cannot exist without inflating the money supply, which in its self is nothing more that the cause of poverty and economic disparirty. It is that simple.

Fri, 06/22/2012 - 09:06 | 2550461 FXPortent
FXPortent's picture

Economic Fallacies in One Lesson.

 

Congratulations, you have bought into some of the stupidest lies and myths that I have ever heard of.

 

Must be a Levin/Hannity/Limbaugh listener with his handy National Review magazine in hand.

Fri, 06/22/2012 - 09:58 | 2550727 TK69
TK69's picture

The truth is what is is despite your lack of expertise.  And no, these talk show host would disagree as this shatter their twisted version of reality as well.  Growth based economic polices are nothing more than a loosening of loan standards so that people borrow money and inflate the money supply thanks to the fractional reserve system.  And money that is borrowed must eventually be paid back or defaulted upon, hence the reason for global crises.

Fri, 06/22/2012 - 10:24 | 2550805 De minimus
De minimus's picture

And when it does come we will be left with all those regulations and laws still on the books because their removal would supercharge a recovery, and not benefit those who created those same regulation and laws. Of course enforcement might be a bit of a problem, due to lack of personnel but you can bet that just as soon as they can, they'll be right back at it again!

You can also bet that the media will agree with them.

Fri, 06/22/2012 - 09:00 | 2550438 geewhiz190
geewhiz190's picture

unless china moves more quickly in adopting political reform and takes property rights both real and intellectual more seriously, and reforms it's legal system to offer individuals the right to due process the renminbi will be slow to replace the dollar.  that said, the dollar remains threatened by budget and spending issues we all understand. the dollar will remain the last resort currency for the time being, not due to it's strength, but because the others are either too small or have bigger problems. china's real debt to gdp is probably higher the U.S. not even government decrees can change that.

Fri, 06/22/2012 - 09:01 | 2550439 FXPortent
FXPortent's picture

DOLLAR GOLD BITCHEZ.

In US of A, dollar short you!

Fri, 06/22/2012 - 09:02 | 2550447 FXPortent
FXPortent's picture

Suppossed to be a strikethrough font on the USD

Fri, 06/22/2012 - 09:11 | 2550469 johnjkiii
johnjkiii's picture

The dollar will still glue together the worlds biggest economy and the main reason it is THE current reserve currency. The world - due to tech - is able to handle all trade using numerous currencies. This is why it will be possible to have several that act on behalf of importers & exporters. We lose nothing by this unless we eff up out banking & currency faster than the Euro/Japanese/Chinese countries. The most stable currency is the one that wins. Which one do you pick to get that recognition?

Fri, 06/22/2012 - 09:12 | 2550470 johnjkiii
johnjkiii's picture

The dollar will still glue together the worlds biggest economy and the main reason it is THE current reserve currency. The world - due to tech - is able to handle all trade using numerous currencies. This is why it will be possible to have several that act on behalf of importers & exporters. We lose nothing by this unless we eff up our banking & currency faster than the Euro/Japanese/Chinese countries. The most stable currency is the one that wins. Which one do you pick to get that recognition?

Fri, 06/22/2012 - 09:15 | 2550484 Yes_Questions
Yes_Questions's picture

 

 

They hate us for or freedoms.

Time to Bomb Russia.

Fri, 06/22/2012 - 10:59 | 2551048 Doug_Canada
Doug_Canada's picture

What a load of shit. No one cares about your freedoms. Not the Chinese nor the Arabs. They hate you for the freedoms of other people you take away- Full stop.

Fri, 06/22/2012 - 11:35 | 2551246 TalkToLind
TalkToLind's picture

D.C.

Please stop taking sarcasm seriously and please stop falling for the "Americans Are Free" propoganda.  Have a nice day.

Fri, 06/22/2012 - 09:16 | 2550488 Doug_Canada
Doug_Canada's picture

This is natural and makes perfect sense. BUT How can China find partners in this when they fuck around with their currency so much? Or are these other currencies so devalued that they don’t mind the artificially devalued China money? Or do they know it is devalued and hope to be holding lots of it when it does go up?

US Dollar is on the chopping block. And why not- It is what the pound was at the start of the 20th century. 

Fri, 06/22/2012 - 09:31 | 2550571 SovereignSilver
SovereignSilver's picture

Cause China gots da gold.

Fri, 06/22/2012 - 11:33 | 2551236 post turtle saver
post turtle saver's picture

You do realize the USA has amongst the highest gold reserves per capita in the world (in fact, larger than China's and India's by far)? Not to mention the largest raw gold holdings in the world? As large as the next three holders combined (Germany / Italy / France)? Almost eight times larger than China's holdings?

Let's say the world does go through with the huge debt deflation jubilee and back to the gold standard? Who do you think the world is going to use for a reserve currency? China? Freaking CHINA? You have got to be kidding me.

The only reason gold is worth anything is because the USA _says_ it's worth anything as denominated in USD. The USA is the largest economy and _only_ superpower in the world. Period, end of story. The BRICs can push string until the cows come home but they aren't going to get anywhere in the face of that fact of life. We saw this "Asian Tiger" crap tried before with Japan and look at the kick in the teeth they got for it. Now Japan is going to try to get all buddy-buddy with the BRICs and attempt to unwedge itself from the USD? Ha ha ha don't make me laugh.

The world time and time again underestimates just how wealthy and powerful the USA is. Everyone thinks they can take us for some damn reason I have yet to fathom because every time those ankle-biters try they get their face pushed in. Those idiots have learned NOTHING from what we did to Iraq when they tried that "oil in Euros" trick and now Iran is trying to do the same thing. In six years we're going to see Ahmadinnerjacket pulled out of a spider hole by the DEVGRU folks after Iran has been completely overrun by the US military. When that Sideshow Bob exercise is done everyone will kowtow to the USA like always.

George Carlin said it best when it comes to other countries trying to take over the USA's number one position... "Bullshit, that's OUR fuckin' job!"

Fri, 06/22/2012 - 15:34 | 2552109 New World Chaos
New World Chaos's picture

A few points:

 

  • The gold in Ft. Knox has long since been shipped to the Fed and then to the private vaults of the hofjuden.  Some tungsten-core bars remain, to keep up appearances.  This is why they don't audit the place.
  • Deflation always leads to printing, or war.  Those are the only methods of debt jubilee in modern times. 
  • If the world goes back to a gold standard, the reserve currency will be gold (until the inevitable fractional-reserve scams start again, inflating the electronic bookkeeping entries relative to the underlying gold).  China wants to be the country running the next big scam.  I think they can get the reserve currency by being the last man standing, like America after WWII.  They just have to wait for all the other major players to self-descruct.
  • The only reason gold is worth anything is because it is naturally occuring MONEY.  It is money because it is rare, compact, hard to steal, divisible, easily recognized, impossible to print out of nothing and its stocks/flows ratio in the high double digits gives it an extremely inelastic supply/demand curve.  These are all characteristics of money.  Gold has been money for 5000 years.  Gold is money regardless of what the dollar and its voodoo priests think.  It has more characteristics of money than the dollar does.  People will rediscover its value the hard way.
  • We will have a hard time pushing ankle-biters' faces in when we can't pay for the supplies necessary to fight wars all over the world.  We have gotten to the point where the more we fight to preserve dollar hegemony, the more we destroy the dollar, which makes it harder to fight.  3.5 trillion dollars for Iraq.  How did that work out?
  • We are turning America itself into a giant centrally planned prison.  Many have tried this, and it always leads to mass murder, destruction of long-term competitiveness and ultimate collapse.
  • Using the dollar props up the evil system you seem to revel in.  That alone is reason enough not to use it.
Fri, 06/22/2012 - 16:07 | 2552302 post turtle saver
post turtle saver's picture

Sorry, I stopped reading after the very first bullet. If you believe that you'll believe anything. I could just as easily say there's green cheese in Fort Knox covered in yellow paint and my _assertion_ would hold just as much merit as yours.

It may twist your knickers to be told this but the truth is the USA could have _no gold reserves at all_ at this point and still be able to act as the world's reserve currency. Anyone stupid enough to say otherwise will find out just how much uranium, plutonium, deuterium, and tritium we have backing our notes. If they'd rather not be immolated on payment they can choose to stop eating instead since we grow, for example, half the world's corn production and 40% of its soybeans. We're also the world's third largest oil producer and second largest natural gas producer (just barely edged out by Russia).

You tungsten nuts absolutely slay me. What a maroon. Get out of the house and wander around the USA for a bit. You act like the USA is worthless and backed by thin air - you're thoroughly and utterly mistaken.

The world remembers what our production was like during WW2... if we actually fired up the current US economy to full wartime footing and hoisted the black flag it would take your breath away.

Fri, 06/22/2012 - 22:01 | 2552974 Cathartes Aura
Cathartes Aura's picture

that "corn" and those "soybeans" you brag on - many countries have a ban on importing amrkn GMO fud-stuffs. . . by the way most of amrka's wheat is also GMO, and those revered white coat scientists are working on rice, sugar beets, and no doubt more frankenfoods to replace real, nutrient-rich foods.  

sure, amrkn military can threaten to nuke if other nations balk at force-FED-fiat - but those nuke-backed-notes will be toast at the first missile fired - you know this, even if you don't want to admit it here.

and what on earth are you smokin' that lets you imagine there's any "US economy" to fire up "to full wartime footing"?  seriously, get out of the 50's dude, join us here in the Y2k+ real world, where China is currently buying huge chunks of the red/white/blue real estate in Ohio, Michigan, Washington, California, and more.

oh, and don't forget to vote!  have a nice 4th of July!

Sat, 06/23/2012 - 09:09 | 2553411 Redhotfill
Redhotfill's picture

With what production line? In what factories?   What are you smoking?   Have you seen DETROIT and the surrounding areas, where the WWII factories you spoke of used to be?  Have you seen factories in Pittsburg, Cleveland, Minneapolis, or any other place in the rust belt?  Have you seen any new real STEEL MILLS?    Those builings are are stripped out of every bit of copper and steel, and are falling in on themselves.  All the production equipment and other machinery is GONE.  Pryed up off the factory floor, crated up and already been shipped to china, messico, and other places people work in filth for pennies a day!  Its gone daddy gone!  No Tooling NO FACTORIES.  That production you spoke of, in WWII one of the world's biggest copper mines was in Butte, MT  that sucker is closed, where will all the copper come from to build all the new factories you would need to suport a war effort on the scale of WWII?   Why you think Chy-nah buy copper here every day, and ship back to ah chy-nah round eye?  Oh yeah and resources appropriated by use of atomic weapons are no good too much residual radiation to be safely used.  Yes the gold has been pledged and in some of the Ron Paul run hearings the fed admitted that they have gold certificates issued to them from FDR times..... back when the United States of America went bankrupt.   Those treasuries the FED owns are backed by the full faith and credit of the US, and the redemption /and repayment of loans to the FED is governed by the  Federal Reserve Act with its dozens of amendments to include those gold certificates, and the pledging of the gold.  Why do you think the people who own the FED want the dollar inflated to kingdom come?  So the nominal value of the debt is so high there isnt enough gold anywhere to cover what is owed.   If you dig deep enough you start to find out all the places where there are large amounts of gold become national parks etc and then to become world herritage sites.  Try getting permission to go mining anywhere!  Ask why have they amened the mining act, and homestad acts?  There is plenty of useful federal land locked up that should be in production either in mining or being homesteaded , but those lands are collateral too.  When the house of cards falls the FED will want to be paid, not in FRN's but actual consitutional money, just look at the Federal Reserve Act, they are due it.   Eventually every army stops fighting when the $$ they are paid with doesnt buy anything.   Have fun with that.

Fri, 06/22/2012 - 12:21 | 2551440 AurorusBorealus
AurorusBorealus's picture

If Brazil sells China oil or lumber or whatever and receives Chinese currency.  There is much that Brazilians can buy with Chinese money... such as anything made in China.  The value of a fiat currency in trade is supported by the manufactures of the country issuing the currency.  So what is holding up the value of the USD, other than tradition?  The answer is... nothing, because the only thing the U.S. makes that anyone wants is military equipment, and the U.S. only sells to these to a select few.

Fri, 06/22/2012 - 09:30 | 2550568 Monedas
Monedas's picture

The US is a keystone card in the ponzi house of cards .... you can't just pull it out without the whole world collapsing !    We are the Ponzi Masters and we still have the world in the palm of our hand !  The jokes on you .... basket fucking Christine Legarde while suspended over the Grand Canyon ... world class gash !   It's not fair .... but we win again !   That says more about the sorry state of the world socialist community !    "In a world of blind socialists .... the one eyed Capitalist is King " !"     Monedas     1929       Comedy Jihad In Mexico Two Lesbians Making Love Is Referred To As "Making Tortillas" .... Slap, Slap, Pity Pat, Slap Slap ?

Fri, 06/22/2012 - 09:32 | 2550576 BalanceOrBust
BalanceOrBust's picture

Oddly, no damage to the US $ index today.  Indeed, quite the opposite.

Up is down and down is up.  Have a sip out of the glass.

Fri, 06/22/2012 - 09:34 | 2550589 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Good post T. D.  Who knows what will be the straw that finally breaks the camels back?  Whatever it might be you can bet George Soros will provide that straw!

Tuco

Fri, 06/22/2012 - 09:47 | 2550628 SovereignSilver
SovereignSilver's picture

Dollar index is just great...compared to other currencies. Least worse of the worser.

Fri, 06/22/2012 - 09:34 | 2550587 Arnold Ziffel
Arnold Ziffel's picture

Tic...toc...tic...toc....

Fri, 06/22/2012 - 09:52 | 2550693 Temporalist
Temporalist's picture

The PBOC needs to hire the same PR firm as the Funeral Reserve and call the Remninbi and Yuan the "Chinese Dollar" to help promote their own fiat.  Stupid people are easily fooled by name recognition.

Fri, 06/22/2012 - 10:04 | 2550755 humblepie
humblepie's picture

China's got gold. Yes, but what happens if gold prices fall?  I wouldn't put it pass the TPTB to be engineering some kind of conspiracy to manipulate the price of gold to cripple the Chinese at the right moment. The Japanese Yen was once touted to become the Reserve currency that will replace the USD. I guess that didn't work out too well.

Fri, 06/22/2012 - 10:38 | 2550909 slackrabbit
slackrabbit's picture

YOu can add New Zealand to that as well as Austrailia - so thats the South Pacific

http://news.xinhuanet.com/english2010/china/2011-04/18/c_13834408.htm

 

Fri, 06/22/2012 - 11:14 | 2551120 q99x2
q99x2's picture

The Elite-scum is in process of imploding US banks, lowering the price of oil and moving into a new reserve currency. Get ready for the invasion of the DHS as Jamie Dimon hits the EBT kill switch.

Fri, 06/22/2012 - 11:14 | 2551121 PaperBear
PaperBear's picture

That’s another US$29bn that the world no longer needs. I wonder how many fewer dollars all these agreements is taking from the world’s demand for USD ?

Fri, 06/22/2012 - 11:46 | 2551307 afton
afton's picture

stairway to heaven ?

Fri, 06/22/2012 - 16:18 | 2552346 TraderTimm
TraderTimm's picture

There, fixed the graph.

http://www.flickr.com/photos/tradertim/7421710692/

Yes, I'm serious.

 

Sat, 06/23/2012 - 09:14 | 2553424 Redhotfill
Redhotfill's picture

LOL  BITCOIN!  NERD Electronic currency.  Is it backed by rare comic books or star trek memorabilia signed by Billy Shattner?

Sat, 06/23/2012 - 12:51 | 2553822 TraderTimm
TraderTimm's picture

No, its backed by a bearded man who can print as much of it as he likes, under different distracting program names.

Oh wait, you meant bitcoin, lol.

The dollar is going to pass into second-rate status, that I can assure you.

Do NOT follow this link or you will be banned from the site!