Monday, May 26, 2014

Huffington Post - Birth of a Eurasian Century

The Huffington Post runs this article by Pepe Escobar which talks about the emerging relationship between Russia and China and a coming end to the Petrodollar.

Here is a quote regarding the petrodollar from this article:

"Exit the Petrodollar, Enter the Gas-o-Yuan

And then, talking about anxiety in Washington, there’s the fate of the petrodollar to consider, or rather the “thermonuclear” possibility that Moscow and Beijing will agree on payment for the Gazprom-CNPC deal not in petrodollars but in Chinese yuan. One can hardly imagine a more tectonic shift, with Pipelineistan intersecting with a growing Sino-Russian political-economic-energy partnership. Along with it goes the future possibility of a push, led again by China and Russia, toward a new international reserve currency -- actually a basket of currencies -- that would supersede the dollar (at least in the optimistic dreams of BRICS members)."
Here is this full short article:
"Russia May 24 (Reuters) - Russia and China need to ensure their gold and currency reserves are secure, Russia's President Vladimir Putin told foreign journalists at the St Petersburg International Economic Forum.

"For us (Russia and China) it is important to deposit those (gold and currency reserves) in a rational and secure way," he said. "And we together need to think of how to do that keeping in mind the uneasy situation in the global economy."

Putin also said China and Russia will consider further steps to shift to use of nationalcurrencies in bilateral transactions. (Reporting by Alexei Anishchuk and Paul Ingrassia, writing by Jason Bush)"
Russia also recently sold off a substantial amount of US bonds and then turned around and bought nearly 1 million ounces of gold. Russia continues to rapidly build its gold reserves as does China. China has also stopped buying US bonds leaving Belgium (of all places) to have to step in to buy huge amounts of US bonds. Some believe the Belgium buying is actually funded by Central Banks such as the ECB. 
Summary of the above: 
Russia and China are steadily reducing their paper US bond reserves and building up gold reserves. They are also working to bypass the US dollar everywhere they can in trade agreements and energy deals. It's really not even a question any longer as to what they intend to do. They are working to get out from under the US dollar as global reserve currency. They are hedging their current US dollar holdings while they work on it. If the IMF will not change to accomodate what they want, they intend to eventually be in position to do what they want regardless of what the US and IMF do.

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