By "Punishing" France, The US Just Accelerated The Demise Of The Dollar

Here is the full google translated segment:

Q. Doesn't the role of the dollar as an international currency create systemic risk?

Noyer: Beyond [the BNP] case, increased legal risks from the application of U.S. rules to all dollar transactions around the world will encourage a diversification from the dollar. BNP Paribas was the occasion for many observers to remember that there has been a number of sanctions and that there would certainly be others in the future. A movement to diversify the currencies used in international trade is inevitable. Trade between Europe and China does not need to use the dollar and may be read and fully paid in euros or renminbi. Walking towards a multipolar world is the natural monetary policy, since there are several major economic and monetary powerful ensembles. China has decided to develop the renminbi as a settlement currency. The Bank of France was behind the popular ECB-PBOC swap and we have just concluded a memorandum on the creation of a system of offshore renminbi clearing in Paris. We have very strong cooperation with the PBOC in this field. But these changes take time. We must not forget that it took decades after the United States became the world's largest economy for the dollar to replace the British pound as the first international currency. But the phenomenon of U.S. rules expanding to all USD-denominated transactions around the world can have an accelerating effect.

More here....

Punishing Fance

Oooops....that sanction went well.

But as Noyer said, this will take time to happen. However, with more and more countries trading outside the dollar, the bigger picture is not looking good IMHO.

a reply to: angelchemuel

The power of the US$ has ensured incoming finance for the States Coffers for years and if the States wants to keep this virtually unearned income flowing in, they need to keep people sweet on using the Dollar as the world currency, not antagonize them and send them into other currencies out of anger or frustration. Especially when the USA banks are not renown for their own business operations.

This is what most of the recent ME wars have been about because those oil countries wanted to sell their oil in other currencies or didn'[t have a central bank, not weapons of mass distraction and men like Bush and Blair are the walking proof of it. China, Russia, India and a lot of other countries have kept pretty well out of all the expense of this and are simply waiting for the opportunity to dump the dollar - its probably only the reserves they hold that have let the $ hang on for so long.

We should always look at the financial situation before we are talked into wars that don't threaten us except for the security of the $. The EU, one of the USA's closest allies will be thinking carefully about the effect of the collapse of the $ and how it would effect the stabilisation of its member countries.

a reply to: angelchemuel

I hate reading blocks of text without formatting , can you sum it up?

IBM sold computers to both the allies and nazis during world war 2. When business decisions are based on the bottom line it does not really matter who does the killing. Applying sanctions due to a navy construction project does come across as a dummy spit. In terms of the USD there is a lot going on, but it is another straw on the camels back.

a reply to: PhoenixOD
That block of text as you put it is how it came from the link.

But to help here is a paragraph from the article which will sum it up better than I can..

Putting this whole episode in context: in an attempt to punish France for proceeding with the delivery of the Mistral amphibious warship to Russia, the US "punishes" BNP with a failed attempt at blackmail (recall that as Putin revealed, the BNP penalty was a used as a carrot to disincenticize France from concluding the Mistral transaction: had Hollande scrapped the deal, BNP would likely be slammed with a far lower fine, if any). Said blackmail attempt backfires horribly when as a result, the head of the French central bank makes it clear that not only is the US Dollar's reserve currency status not sacrosanct, but "the world" will now actively seek to avoid USD-transactions in order to escape the tentacle of global "pax Americana."

There's more info at the link.
Shilo7 gave a rather good overview too


Rainbows
Jane

a reply to: angelchemuel


I find this interesting within the context of a number of countries moving away from the dollar or joining other financial alliances, like B.R.I.C.S.

It's happening fast and it's happening now.


Saudi Arabia Joining Brics?


Russia may legalize BitCoin

a reply to: angelchemuel

It seems to me, that rather than talking quietly, and carrying a big stick, the US government have begun a policy of shouting and stamping their feet, while wafting dollar bills and paperwork.

There is no way in the world that anything positive can come of that behaviour.

a reply to: antoinemarionette
Hi, yes it does seem to be gaining momentum.
Thank you for your added links.
It might be worth having a look around and collating all the countries that are already not using the dollar, and then another one where countries are moving away.
I shall have a go later today.
Rainbows
Jane

a reply to: TrueBrit

Hi True *waves*

Yes, a bit like having a temper tantrum and throwing your dummy out of the pram.
If they don't change their 'behaviour' (read policy) then they are on a hiding to nothing.
Rainbows
Jane

a reply to: angelchemuel

Heh.. *waves back*

To carry on the childhood analogy, the US has a ball, and all the neighbour kids play with him, because his ball is always clean, has all its outer panels intact, and he spends an awful lot trying to make sure he always has the latest World Cup ball. As a result it rolls cleanly, and bounces predictably, making for a better game, normally speaking.

However, his behaviour has driven some of the smarter kids down the street, where another kid has another ball. Sure, it's older, and tattier, and some of its panels flap amusingly when the ball rolls under kicking power, and it does not always bounce in a predictable fashion, but it is worth hanging out with that other kid, because he does not behave like a control freak toward those who want to play with him.

To put this into a more relevant context, the people I feel sorry for in all this, are the American people, because it's their lives that would be most drastically affected by a polar shift to the east, or indeed a dispersed reserve system. Tis a deeply messy business that the US government are about at the moment, and they are playing with people's futures, and not just those of citizens of the US, but of many other nations as well.

There is nothing necessarily wrong with a move away from the dollar as a reserve currency of course, but if the US government force people away by behaving poorly toward them, the transition will be much more drastic and immediate than necessary, and create deeply unhelpful fluctuations in markets which are not entirely stable as it is, owing in large part to the madness of the last decade in banking.

a reply to: TrueBrit

Eloquently put sir.

Obama: “We are ..Days Away From Fundamentally Transforming The United States of America”

Hmmmmmmmm......maybe this is what he meant? (sarcasm)

Rainbows
Jane

It's the bankers that are calling the shots .By hook or by crook .Just like they did with the collapse in 2008 . Lets just hope that there are higher ups in the military that wont go along with cry to war . I am not so sure they have complete confidence they can take down the bigger boys on the block at this time.

The big problem for the US and it is their fault ,is that when all those $$ come home to roost you will probably need a dump truck full of them to be worth anything . A wheel barrel full aint going to cut it .

I just went to post the above and the power here blinked .darn storm .

a reply to: TrueBrit

Very true and with FACTA already some Mexican banks are pushing american customers out because of the high cost it takes to process american expats over seas. People would rather just not deal with the costs...its americas way of trying to keep the money back in the usa. Man all signs point to doom! And I see no attitude changing either.

a reply to: rockpaperhammock

Its as if the people making these new policies have not paid attention to how local markets react to this sort of thing. Do you know, that of all the credit card companies operating globally, American Express is one of the most expensive to the retailer? If I sell a product and the customer pays for it using one, the cost of that transaction to me as a retailer would be much higher than other, locally administrated cards would be.

That is why we, and most of the businesses on our street, refuse to have anything to do with transacting business using those cards. Similarly, now that the cost of doing business in dollars is getting higher, the speed of its abandonment as an international currency will surely increase!

Yet if war broke out with Russia, which seems more likely than ever, France would be begging for US military assistance in destroying the weapons the French are giving Russia.

It's like your neighbor has been threatening your friends and other neighbors and you sell him a gun. Not too smart.

originally posted by: kwakakev
IBM sold computers to both the allies and nazis during world war 2.

No they did not. Punch card machines were sold to the German's in the 1930's - and many other customers besides. In WW2 the IBM subsidiary was taken over by the Germans. Computers were developed during WW2 by the British.

Either way, what IBM did in another time just proves that businesses deals with unsavoury governments in the pursuit of profit, often in contravention of sanctions.

Regards

a reply to: paraphi

While trade and development has some grey area during conflict, the Swiss done quite well remaining neutral and providing a clearing house during and after the war.

As for France doing a military trade with Russia, they do live a lot closer to them and need to get on. No one there wants to live with missile shields and constant antagonism. It breaks down trade and limits the mutual benefit, do we really want another wall like in Korea?

Here's another one to add to the list...
CEO Of One Of The World's Largest Energy Majors "Sees No Reason For Petrodollar"

The USA is fast running out of friends to support its 'exorbitant privelege'. Having alienated the Germans over NSA-eavesdropping, 'boomerang'd the Russians into de-dollarization, tariffed and quantitatively eased China into diversification, and finally 'punished' France into discussing the dollar's demise; it appears no lessor person than the CEO of Total (the world's 13th biggest oil producer and Europe's 2nd largest), believes "There is no reason to pay for oil in dollars." Clearly, based on Christophe de Margerie's comments, that we have passed peak Petrodollar.

As Brandon Smith concluded previously with regard the 'anything but random' nature of th emore frequent discussion of the dollar as resever currency:

The dollar is no more invincible than any other fiat currency in history. In some ways, it is actually far weaker than any that came before. The dollar is entirely reliant on its own world reserve status in order to hold its value on the global market. As is evident, countries like China are already dumping the greenback in trade with particular nations. It is utterly foolish to assume this trend is somehow “random” rather than deliberate. Foreign countries would not be initiating the process of a dollar dump today if they did not mean to follow through with it tomorrow. All that is left is for a cover crisis to be conjured. Existing tensions in the Mideast signal a pervasive crisis, most likely an energy crisis, in the near term.
It appears that making friends and influencing people is the opposite of what America is achieving...at a time when it needs them the most.

More on what the CEO of Total had to say here....
CEO Total

Total of course is a French company.

Rainbows
Jane

a reply to: angelchemuel

The entire situation could flip overnight and that's the danger. If France and a bunch of other countries get together in backrooms and decide to collectively dump the US dollar and start trading in the Euro or Renminbi, it will probably be the beginning of a financial avalanche. Once that starts, there's probably no turning back and the US will collapse like a house of cards in a hurricane.

Cheers - Dave

Ooops...and now look who's waded in....

And now The Triple Whammy

*FRANCE SAYS INCREASING EURO USE IS ISSUE OF 'GLOBAL BALANCE'
*SAPIN SAYS EURO AREA NEEDS TO LEAD DISCUSSION ON DOLLAR USE
*FRANCE NOT FIGHTING 'DOLLAR IMPERIALISM,' SAPIN SAYS (wo shy mention it?)
French Finance Minister Michel Sapin says that now is the right time to bolster the use of the euro in transactions outside the U.S. Sapin speaks in an interview with Bloomberg News in Aix-en-Provence, France.

“We sell ourselves aircraft in dollars. Is that really necessary? I don’t think so,” Sapin says, adding "I think a rebalancing is possible and necessary, not just regarding the euro but also for the big currencies of the emerging countries, which account for more and more of global trade."

“We can avoid the exchange rate risk, and that’s always useful. We can diminish financing costs in pricing more in other currencies,” Sapin says.

“This is not a fight against dollar imperialism,” Sapin says.

“It’s up to Europe, to the euro zone in particular, to lead this argument,” Sapin says.

As The FT reports, Mr Sapin said he would raise the need for a weightier alternative to the dollar with fellow eurozone finance ministers when they meet in Brussels on Monday, although he declined to go into detail about what practical steps might emerge.

Full report here...

France's Triple Whammy

Pretty strong words there.....the French are pretty renowned for their 'strike' techniques on their own turff.....but how much of this is really bluster? Not a lot me thinks....they are now looking for Euro allies....

Rainbows
Jane