China, Argentina to conduct trade in Chinese currency

China, Argentina to conduct trade in Chinese currency

www.gata.org

China, which is pushing to end the dominance of the dollar as a worldwide reserve, has agreed a 70 billion renminbi currency swap with Argentina that will allow it to receive renminbi instead of dollars for its exports to the Latin American country.

Xinhua, the official Chinese news agency, said the deal was signed on Sunday by Zhou Xiaochuan, governor of the People's Bank of China, and Martín Redrado, Argentine central bank president, in Medellín, Colombia, where they are attending a meeting of the Inter-American Development Bank.

(visit the link for the full news article)

It has begun in earnest, the dropping of the dollar for trade between countries. This deal is worth 95 billion between China and Argentina.

For those who have not been completely realizing that the dollar will completely go flat and be dropped by the end of the year (estimate) as the reserve and trading currency - just look at the countries dropping it as the trade currency now.

Other countries had already struck a deal with China, but Argentina is a huge country, with them leaving the U.S. dollar as the trade currency, I would not be surprised to see many more large companies follow the pack now in short order.

Beijing has signed 650 billion renminbi ($95 billion, E72 billion, L67 billion) of deals since December with Malaysia, South Korea, Hong Kong, Belarus, Indonesia, and, now, Argentina in an attempt to unblock trade financing that has been severely curtailed by the crisis.

China has suggested replacing the dollar with an enhanced version of the International Monetary Fund's unit of account, the special drawing right or SDR. The dollar's future as the world's reserve currency will be on the G20 agenda.

Economists say the SDR plan is unfeasible for now but see Beijing's currency swap deals as pieces in a jigsaw designed to promote wider international use of the renminbi, starting with making it more acceptable for trade and aiming at establishing it as a reserve currency in Asia, something that would also enhance China’s political clout.

The deals underscore China's loss of faith in the US currency amid the fallout from the financial crisis. The Argentine accord will also boost China's financial presence in Latin America.

Mr Redrado voiced support for China's call for a new currency reserve regime at his meeting with Mr Zhou. "One of the issues was this idea to incorporate other options to the dollar. There was a lot of consensus on this," the Argentine official told the Financial Times.

By paying attention to this and Russia announcing the other day, it wanted a currency linked to a "Gold Standard", people should be getting the hint, to start purchasing when possible gold and silver.

It is slowly but surely happening where other countries are dropping the dollar. Since Argentina is trading off the dollar now, would it be surprising for most of the other countries in South America to follow their lead?




www.gata.org
(visit the link for the full news article)

From my point of view is a good move from my hermanos argetinos.

I hope my country make the same deal for our own safe because I can't trust in the dollar anymore. Its complete madness what the EUA is doing to himself.

This is the beginning of the end. That and the monetization of debt... And the huge deficits, and the 5 major banks in the US being deep under hundreds of trillions from derivatives.

The US is screwed for a long time. Probably more than a decade.

reply to post by Vitchilo


The beginning of the end started a long time ago, people have simply been trying to cover it up.

This is the middle, once countries drop the dollar on a whole, and let's hold our breath on OPEC, saying no more trading in dollars, as they tried last year. Then when China says, we are not buy t-bills at all anymore..... well people in the U.S. can bend over and kiss themselves! If you know what I mean.

But it is all coming..... it is just taking time.