China and russia dump usd (Putin, enemy, Canada, Reid)

[Swingblade]

This is a interesting development and I wonder what this will mean to us, and what are response will be?

China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.
Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies.

I do not think our response will be to harsh considering this statement :

Wen said at the press conference that the partnership between Beijing and Moscow has "reached an unprecedented level" and pledged the two countries will "never become each other's enemy".
China, Russia quit dollar - China News - SINA English

And just think we gave China most favored nation status and the audacity of them to turn their backs on our currency and team up with the Russians.After all that we have done for them they now think we are a bunch of lemmings,HMMMM they could be right.

[HappyTexan]

The world warned Bernanke NOT to print more money.
He didn't listen.

[Neuling]

Why would two countries, in neither of which the dollar is the national currency, use the dollar in the first place? Why would the US and Canada use the Euro or the Yen for their bilateral trade?
There are also plans for the trade in oil and gas to be carried out using currencies other than the dollar, that would have much more severe consequences.

[Swingblade]

Originally Posted by HappyTexan

The world warned Bernanke NOT to print more money.
He didn't listen.

They see the writing on the wall and it would be dumb of them to accumulate more of our currency when it is being devalued. But Barnanke did say he had "many tricks in his hat besides QE " so far we have seen 1 trick. I do not think he has anything else.

[JazzyTallGuy]

Originally Posted by Neuling

Why would two countries, in neither of which the dollar is the national currency, use the dollar in the first place? Why would the US and Canada use the Euro or the Yen for their bilateral trade?
There are also plans for the trade in oil and gas to be carried out using currencies other than the dollar, that would have much more severe consequences.

U.S Dollars are used in a significant numbers of international transactions. The Dollar is still considered the most stable currency in the world.

[Neuling]

Originally Posted by JazzyTallGuy

U.S Dollars are used in a significant numbers of international transactions. The Dollar is still considered the most stable currency in the world.

I don't think so, in my opinion it is more of a tradition dating back to the times when the US economy was still dominant.

[Swingblade]

Originally Posted by Neuling

Why would two countries, in neither of which the dollar is the national currency, use the dollar in the first place? Why would the US and Canada use the Euro or the Yen for their bilateral trade?
There are also plans for the trade in oil and gas to be carried out using currencies other than the dollar, that would have much more severe consequences.

I think USD will lose it role as the worlds reserve currency and it would be deserved. There has been much talk of adding other nations currencies to the SDR basket and calling it the Bancor. Here is a good article on that :
Bancor: The Name Of The Global Currency That A Shocking IMF Report Is Proposing

You are right if USD lost it's role as reserve currency we will be the next Zimbabwe.

[JazzyTallGuy]

Originally Posted by reid_g

This is a interesting development and I wonder what this will mean to us, and what are response will be?


I do not think our response will be to harsh considering this statement :

And just think we gave China most favored nation status and the audacity of them to turn their backs on our currency and team up with the Russians.After all that we have done for them they now think we are a bunch of lemmings,HMMMM they could be right.

This is a power play, pure plain and simple.

[Neuling]

Originally Posted by reid_g

I think USD will lose it role as the worlds reserve currency and it would be deserved. There has been much talk of adding other nations currencies to the SDR basket and calling it the Bancor. Here is a good article on that :
Bancor: The Name Of The Global Currency That A Shocking IMF Report Is Proposing

You are right if USD lost it's role as reserve currency we will be the next Zimbabwe.

Although the name Bancor is really ugly (sounds like banker, not a good start), I do absolutely support the introduction of a universal currency. It would deal a serious blow to speculators.
The only problem might be that the price levels around the world are so different. So we might need Microbancors and Megabancors

[ovcatto]

Nothing personal, but while the prestige of the Dollar being the premier reserve currency is great for the national ego, a devalued dollar ain't exactly bad for exports and if the US would like to become a producer instead of a consumer, there could be worse things to happen.

By they way, the Chinese Yuan isn't a reserve currency and the Chinese economy doesn't appear to be doing too badly.