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Thread: China, Russia quit dollar

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    China, Russia quit dollar

    St. Petersburg, Russia - 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.
    "About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.

    The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities.

    The yuan has now started trading against the Russian rouble in the Chinese interbank market, while the renminbi will soon be allowed to trade against the rouble in Russia, Putin said.

    "That has forged an important step in bilateral trade and it is a result of the consolidated financial systems of world countries," he said.

    Putin made his remarks after a meeting with Wen. They also officiated at a signing ceremony for 12 documents, including energy cooperation.

    China, Russia quit dollar

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


    j-mac
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    Re: China, Russia quit dollar

    It's a warlike action to back out of a currency that is clearly destined for collapse in the not too distance future?

    I would call that sane fiscal policy. Although I'm not sure China can truly do it.

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    Re: China, Russia quit dollar

    Quote Originally Posted by j-mac View Post
    And some believe that the cold war ended....Silly people.


    j-mac

    The cold war is one issue; China and Russia deciding to trade in their own currencies when dealing with each other is another issue.

    How do the two issues relate?

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    Re: China, Russia quit dollar

    They just don't want to get caught holding US dollars in case the dollar becomes worthless. There's nothing cold war about their decision to use their own currencies.

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    Re: China, Russia quit dollar

    Quote Originally Posted by Infinite Chaos View Post
    The cold war is one issue; China and Russia deciding to trade in their own currencies when dealing with each other is another issue.

    How do the two issues relate?
    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.

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    Re: China, Russia quit dollar

    Quote Originally Posted by Mickey Shane View Post
    They just don't want to get caught holding US dollars in case the dollar becomes worthless. There's nothing cold war about their decision to use their own currencies.
    If that was such a concern then why yesterday when NK attacked SK did we see a surge in the dollar being bought?

    j-mac
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    Re: China, Russia quit dollar

    Quote Originally Posted by j-mac View Post
    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
    A weaker dollar means more competitive exports which could actually be a good thing for businesses.

    I remember when our dollar hit parity with yours and we actually lost some jobs because of it.

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    Re: China, Russia quit dollar

    Quote Originally Posted by Jetboogieman View Post
    A weaker dollar means more competitive exports which could actually be a good thing for businesses.

    I remember when our dollar hit parity with yours and we actually lost some jobs because of it.
    No man you don't understand.

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    Re: China, Russia quit dollar

    Quote Originally Posted by j-mac View Post
    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
    So do you count the US Federal Reserve as being on China and Russia's side as they have been involved in quantitative easing since 2008 and specifically trying to weaken the dollar to help exports and reduce the dollar debt to China?

    What is the Fed doing, and how can it help the economy?
    The central bank is embarking on the electronic equivalent of starting up its printing presses to create money to buy assets—in this case, U.S. Treasury securities, mostly notes. The practice is known as quantitative easing, and is designed to push down the notes' yields, as well as interest rates across debt markets that are closely tied to U.S. Treasury rates.

    Lower borrowing costs should help some homeowners refinance their mortgages, even if many others don't qualify because of weak credit scores or diminished home equity. They should also help businesses, at least those that qualify for loans, access cheaper credit. The Fed figures buying up government debt will also push investors into stocks and corporate bonds, raising the value of those riskier assets, and weaken the dollar, helping U.S. exporters.

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    Re: China, Russia quit dollar

    Quote Originally Posted by j-mac View Post
    And some believe that the cold war ended....Silly people.
    China made a similar agreement with Brazil. Are those Brazilans out to get us too?

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