OUT OF MIND
Would you like to react to this message? Create an account in a few clicks or log in to continue.
Latest topics
» 36 Million Families to Stop Receiving Monthly Child Tax Credit Payments in January
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 6:11 pm by bigdog2aton

» Mysterious town in Japan is obsessed with UFOs and aliens
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 1:31 pm by PurpleSkyz

» Martin Luther King, Jr. I Have A Dream Speech
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 12:20 pm by PurpleSkyz

» Myocarditis Tops List of COVID Vaccine Injuries Among 12- to 17-Year-Olds, VAERS Data Show
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 12:14 pm by PurpleSkyz

» Non-Jabbed Father Stripped of Visiting Rights by Judge
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 12:11 pm by PurpleSkyz

» Dangerous M6.6 earthquake hits off Java, Indonesia
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 12:08 pm by PurpleSkyz

» Life insurer refuses to cover vaccine death
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 12:01 pm by PurpleSkyz

» Dr. Sam White Interview – Doctors Are Being Suppressed, Censored & Attacked For Telling The Truth
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 11:32 am by PurpleSkyz

» American Students Organize Classroom “Walk Outs” To Demand Return To Remote Learning
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 11:27 am by PurpleSkyz

» 15-Year-Old Soccer Player from Brazil Dies from Cardiac Arrest Following National Football Cup Tournament Game
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 12:34 am by PurpleSkyz

» Route 91: Uncovering the Cover-Up of the Vegas Mass Shooting
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 12:21 am by PurpleSkyz

» COVID-19 Vaccines: Scientific Proof of Lethality
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 12:17 am by PurpleSkyz

» Open Letter to Steve Kirsch
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptyYesterday at 12:14 am by PurpleSkyz

» New Normal: Former Malaysian Professional Football Player Dies of Heart Attack 5 Days After Receiving COVID-19 Booster Shot
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptySun Jan 16, 2022 4:10 pm by PurpleSkyz

» Hundreds of Thousands Protest ‘New World Order’ in France as COVID Narrative Crumbles
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptySun Jan 16, 2022 12:58 pm by PurpleSkyz

» The Full Extent of Jeffrey Epstein’s Crimes Are Slowly Being Revealed
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptySun Jan 16, 2022 12:50 pm by PurpleSkyz

» Japan Drops All Vaccine Mandates, Places Myocarditis Warning on Label
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptySun Jan 16, 2022 12:42 pm by PurpleSkyz

» Why Are Concrete Walls Being Constructed Around The White House?
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptySun Jan 16, 2022 12:36 pm by PurpleSkyz

» Q&A With Scientist Who Discovered Cannabis Can Prevent COVID-19
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptySun Jan 16, 2022 9:52 am by PurpleSkyz

» Tragic: 38yo Athlete Dies after Suffering Heart Attack During Swim Portion at Ironman 70.3 Pucon
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptySun Jan 16, 2022 9:48 am by PurpleSkyz

» Smoking Gun: Moderna Patented ‘Man Made’ SARS-CoV2 Gene Sequence in 2018
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptySun Jan 16, 2022 9:41 am by PurpleSkyz

» NASA Probe Gets Closest Look At Sun’s Atmosphere Than Ever Before And Makes Immediate Discoveries
China And Australia Say Goodbye To World Reserve Currency In Trade Deal  EmptySun Jan 16, 2022 9:34 am by PurpleSkyz








China And Australia Say Goodbye To World Reserve Currency In Trade Deal  4ccd9cb4-22af-4abe-a6c4-4d57fbce210b_zps8t6pdo1h

You are not connected. Please login or register

OUT OF MIND » THE INSANITY OF REALITY » GLOBAL FINANCIAL COLLAPSE » China And Australia Say Goodbye To World Reserve Currency In Trade Deal

China And Australia Say Goodbye To World Reserve Currency In Trade Deal

Go down  Message [Page 1 of 1]

PurpleSkyz

PurpleSkyz
Admin


China And Australia Say Goodbye To World Reserve Currency In Trade Deal






China And Australia Say Goodbye To World Reserve Currency In Trade Deal  Th1

zerohedge – A month ago we pointed out that as a result of Australia‘s
unprecedented reliance on China as a target export market, accounting
for nearly 30% of all Australian exports (with the flipside being just
as true, as Australia now is the fifth-biggest source of Chinese
imports), the two countries may as well be joined at the hip.



China And Australia Say Goodbye To World Reserve Currency In Trade Deal  Australia%20China%20exports_0

Over the weekend, Australia appears to have come to the same
conclusion, with the Australian reporting that the land down under is
set to say goodbye to the world’s “reserve currency” in its trade dealings with the world’s biggest marginal economic power, China, and will enable the direct convertibility of the Australian dollar into Chinese yuan, without US Dollar intermediation,
in the process “slashing costs for thousands of business” and also
confirming speculation that China is fully intent on, little by little,
chipping away at the dollar’s reserve currency status until one day it
no longer is.

That said, this latest development in global currency relations
should come as no surprise to those who have followed our series on
China’s slow but certain internationalization of its currency over the
past two years. To wit: “World’s Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade“, “China, Russia Drop Dollar In Bilateral Trade“, “China And Iran To Bypass Dollar, Plan Oil Barter System“, “India and Japan sign new $15bn currency swap agreement“, “Iran, Russia Replace Dollar With Rial, Ruble in Trade, Fars Says“, “India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees“, and “The USD Trap Is Closing: Dollar Exclusion Zone Crosses The Pacific As Brazil Signs China Currency Swap.”

And while previously the focus was on Chinese currency swap
arrangements, the uniqueness of this weekend’s news is that it promotes
outright convertibility of the Yuan: something China has long said would
happen but many were skeptical it ever would. That is no longer the
case, and with Australia setting the precedent, expect many more Asian
countries (at first) to follow in Australia’s footsteps, because while
the developed world is far more engaged in diluting its currency as a
means to spur “growth”, Asian and developing world nations are still
engage in real, actual trade, where China is rapidly and aggressively
becoming the world’s hub.

More from The Australian:




Former ambassador to China Geoff Raby, now a Beijing-based business figure, told The Weekend Australian: “The
value of such a deal would be substantial for exporters to China,
especially those that import a lot from China like mining companies, as
it would remove business constraints including exchange-rate risks and
transaction costs.




Businesses, like individuals when travelling, have to pay extra to
convert currency since there are different rates for buying and selling.



So removing one step also cuts out the cost of paying for such a “spread”.



Australia has undertaken significant lobbying for the deal and the
direct conversion of the yuan, also referred to as the renminbi (RMB),
is identified as a priority in the government’s Asian century white
paper.



“We have held preliminary discussions with the Chinese government to
explore how soon direct convertibility can be practicably achieved,” the
white paper says.



“We are continuing these discussions, and also exploring other
opportunities to work with China to support the internationalisation of
the RMB.”

Australia’s banks increasingly arrange trade finance through Hong
Kong, which has developed a special role as China’s chief international
finance centre.
Needless to say, China is eagerly looking forward to taking yet another bite out of the USD’s reserve status.




New President Xi Jinping,
a former Communist Party secretary of Shanghai, is a champion of that
city’s development as China’s finance hub, and it is believed that the
Prime Minister may fly there to sign the currency conversion deal.



Ms Gillard is expected to go on from Shanghai to Beijing, where she
will open the third Australia China Economic and Trade Forum organised
primarily by the Australia China Business Council,
which will be bringing about 100 people from Australia for the event.
Participants are likely to include Andrew Harding, Rio Tinto’s new chief
executive for iron ore; Warwick Smith, ANZ
Bank’s chairman for NSW and the ACT; Australian Trade Minister Craig
Emerson and Financial Services Minister Bill Shorten; Gao Hucheng,
China’s Commerce Minister; and Gao Xiqing, the acting head of China Investment Corporation, the country’s vast sovereign wealth fund.



The ANZ Bank has been a strong advocate of direct convertibility
between the dollar and the yuan. Gilles Plante, the bank’s chief
executive in Asia, said in a recent report that in the last financial
year, China accounted for 29 per cent of all exports and 18 per cent of
imports, but the value of that trade denominated in yuan was less than
0.3 per cent.



He forecast that cross-border flows of funds would be liberalised “to
support Shanghai’s plan to build itself as a global financial centre.
At the time the whole world is digging out opportunities from the rise
of the yuan, Australia should not lag behind.”



It was significant the liberalising governor of the People’s Bank,
Zhou Xiaochuan, kept his job during the reshuffle of China’s leadership.
He said last year at a conference: “The next movement related to the
yuan is going to be reform of convertibility. We are moving in this
direction; we need to go further, we will have some deregulation.”
Most importantly, to China, Australia will serve as the Guniea Pig –
should this experiment in FX liberalization work out to China’s
satisfaction, expect Beijing to engage many more trade partners in
direct currency conversion.




Beijing appears to have chosen Canberra as its partner in this next
movement for straightforward economic reasons, as Australia has become
China’s fifth-biggest source of imports and thus, the appropriate
partner for the march of its currency.



Ms Gillard and President Xi Jinping may also during the visit
establish a “strategic partnership” between the countries. This will
enable Australia to catch up in status with a large range of nations.
Why is this so very critical? For the simple reason that the free
lunch the US has enjoyed ever since the advent of the US dollar as world
reserve currency, may be coming to an end as other, more aggressive
alternatives – both fiat, and hard-asset based – to the USD appear. And
since there is no such thing as a free lunch, all the deferred pain the
US Treasury Department has been able to offset thanks to its global
currency monopoly status will come crashing down the second the world
starts getting doubts about the true nature of just who the real reserve
currency will be in the future.

China And Australia Say Goodbye To World Reserve Currency In Trade Deal  Reserve%20Currency%20Status




image by www.shenzhen-standard.com


Thanks to: http://aworldchaos.wordpress.com



  

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum