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China, Russia quit dollar

And some believe that the cold war ended....Silly people.


j-mac

This has nothing to do with the Cold War or communism or anti-American sentiment, or any other little conspiracy theories you've brewed up. This is just intelligent fiscal policy -- the US has been on the decline for a decade now, and the economic crisis has just proven to the world that times change. The US dollar is destined for severe power loss, perhaps even collapse -- and it's been declining for a long while now.

Don't be so Amero-centric as to think it has anything to do with snobbing the States -- this is just Russia and China looking to pursue their own best interests.
 
And some believe that the cold war ended....Silly people.


j-mac

This has nothing to do with the Cold War, but everything to do with our politicians created policies which wrecked the dollar. Did you really think for a minute that other nations would stand by, and allow us to pay back our huge debt with depreciated dollars? In their eyes, that is equivalent to theft. No wonder they are now migrating to other currencies. The dollar is worth much less than other currencies. It's just plain good business sense, which we seem to have left by the side of the road.
 
Just curious.

Why are the people who are quick to say the the world resents the United States also quick to dismiss that any part of the world might be trying to act against the United States?

I'd imagine it would be because: trying to clump all the actions of the world into such a simple formula is ridiculous, as in if I think some parts of the world resent the US than I must also think whatever they do is an act against the US.
 
No, it really isn't separate when you consider that these moves are designed, or at least a side benefit of them is to weaken the dollar.

j-mac
And with our Commander in Weak, nothing will be done to challenge them.
 
This has nothing to do with the Cold War or communism or anti-American sentiment, or any other little conspiracy theories you've brewed up. This is just intelligent fiscal policy -- the US has been on the decline for a decade now, and the economic crisis has just proven to the world that times change. The US dollar is destined for severe power loss, perhaps even collapse -- and it's been declining for a long while now.

Don't be so Amero-centric as to think it has anything to do with snobbing the States -- this is just Russia and China looking to pursue their own best interests.
Wonder what happens if we started cutting into the trade deficit we have with these two countries?
 
Wonder what happens if we started cutting into the trade deficit we have with these two countries?

You mean "Trade Imbalance" right? There is really no such thing as a Trade Deficit, unless one side is gaining 'something'(as in goods and services), and has not paid for that 'something' yet. If you buy something on credit, you are creating a trade deficit. This is a common misconception, and tends to make people think that it is bad, when it isn't. When you go to the store and buy clothing, you are paying with money(physical or electronic). But you didn't pay with clothing, so you are working a "Trade Imballance".
 
Wonder what happens if we started cutting into the trade deficit we have with these two countries?

I suppose we'll see, though I doubt if anything major would occur, even in the unlikely event the US does start to pay it off. Why would that affect the Russo-Chinese switch to domestic currency? Are there not still exhcange rates between the dollar and the rouble? XD
 
This has nothing to do with the Cold War or communism or anti-American sentiment, or any other little conspiracy theories you've brewed up. This is just intelligent fiscal policy -- the US has been on the decline for a decade now, and the economic crisis has just proven to the world that times change. The US dollar is destined for severe power loss, perhaps even collapse -- and it's been declining for a long while now.

Don't be so Amero-centric as to think it has anything to do with snobbing the States -- this is just Russia and China looking to pursue their own best interests.


Amero-centric? What the heck does that even mean? That we should just stand by and take it? Letting China, and Russia undermine the dollar further is an attack on the US. Mu thinking is that you see this as a good thing largely because you agree with a Socialist-Communist mindset.

j-mac
 
Amero-centric? What the heck does that even mean? That we should just stand by and take it? Letting China, and Russia undermine the dollar further is an attack on the US. Mu thinking is that you see this as a good thing largely because you agree with a Socialist-Communist mindset.

j-mac

Why should any sovereign country have to hold your currency? It MIGHT be a move to undermine you, but there's also nothing illegal or wrong with it, unless it had a knock on effect to other currencies that held yours.
 
Why should any sovereign country have to hold your currency? It MIGHT be a move to undermine you, but there's also nothing illegal or wrong with it, unless it had a knock on effect to other currencies that held yours.


How could it not?


j-mac
 
Why should it not? The USD has historically been the de facto international currency, but times have changed.
 
You know, sometimes other countries do things that arent solely to benefit or detriment us.
 
Nations that hold massive currency reserves can be considered currency manipulators. For example, US foreign currency reserves are around 1% of US GDP. In China, they are in excess of 50% of their GDP.
 
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".

Over the past year, "our strategic cooperative partnership endured strenuous tests and reached an unprecedented level," Wen said, adding the two nations are now more confident and determined to defend their mutual interests.

"China will firmly follow the path of peaceful development and support the renaissance of Russia as a great power," he said.

I'm less concerned about their dive in/out of using our currency - seeing as how many other countries don't use it, either, I really don't comprehend the implication and can't realize if it's good or bad. (ignorance yes - bliss maybe).

But this part I quoted is notably disturbing to me.

If our one major fall-back bailout ally is now saddled with our constant grudge then what does that make them - and what does that make them and us?

I think we're going to suffer the consequences of assuming we're "squared away with Russia" - and I note the significance behind this announcement coming *from* St Petersburg.
 
No, it really isn't separate when you consider that these moves are designed, or at least a side benefit of them is to weaken the dollar.

j-mac

Sigh...where to begin.

Why would Russia and China want to weaken the dollar? Did you completely miss that Russia and China both criticized our OWN efforts to weaken the dollar via quantitative easing less than a month ago?

Did you miss the fact that the yuan is pegged to the dollar, and therefore it is IMPOSSIBLE for them to weaken the dollar by switching from the dollar to their own currency?

Why are Russia and China under any moral obligation to use the dollar for their mutual trading, any more than the US and Canada use the euro when trading with one another?

Does your "Cold War" analogy have any substance at all, beyond the fact that you saw the words Russia and China and detected some vague conspiracy against the United States? Do you even know the history of the Cold War? Russia and China were hardly allies for the vast majority of it.
 
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I'm less concerned about their dive in/out of using our currency - seeing as how many other countries don't use it, either, I really don't comprehend the implication and can't realize if it's good or bad. (ignorance yes - bliss maybe).

But this part I quoted is notably disturbing to me.

If our one major fall-back bailout ally is now saddled with our constant grudge then what does that make them - and what does that make them and us?

I think we're going to suffer the consequences of assuming we're "squared away with Russia" - and I note the significance behind this announcement coming *from* St Petersburg.



Many countries use the USD to settle international trade. For example China buys coal from Australia in USD, oil from Russia in USD, ir.on ore from Brazil in USD.

The same pattern is repeated in many different countries as a means of exchange of goods and services for currency. This requires a country maintain a supply of USD so that its banks can settle those trades for the companies they deal with. In general a country should maintain a reserve of USD equal to a few months of normal trade levels that require USD settlement to account for any potential shocks. This eats up some of the "supply in USD" in the world, and causes the USD to be valued higher then it normally would be. However given that both China and Russia have very large USD reserves, the change in using RMB or Rubles as a means to settle trade between the two is not going to effect the USD from an economic standpoint. China and Brazil have already set something up like what China and Russia have done.

So in the short term this means nothing to the USD, in the long term however is sets the foundation for the USD to be replaced or at least be significantly reduced as the worlds reserve currency. The USD being the worlds reserve currency is one of the forms of power the US has in geopolitics.

So short term it means nothing, long term a possible reduction in US geopolitical power.

It also helps ensure that should China or Russia find themselves short of USD they will still be able trade without having to borrow USD from the US fed or Treas ( for example if China decided to buy a significant amount of US federal government land, and the Palin admin needed the money to pay down debts.
 
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