China Moves To Turn Yuan Into Fully Tradable Global Currency

Flashback:

Mike Krieger: This Is The Last Dance:

They refuse to allow the yuan to strengthen because they know that once they do that it will mark the real end of the dollar era. So instead they are spending like crazy on infrastructure ahead of them allowing the dollar to plunge.  Then the strong yuan will be employed to purchase all the commodities they need to utilize their infrastructure and the OECD gets priced out. To those that talk about yuan devaluation, you need to be specific.  Devaluation versus what?  Versus commodities generally along with other currencies?  I can buy that argument very easily.  Versus the dollar, highly doubtful.  Why? The latest data says China owns $877.5 billion in U.S. treasuries. All they have to do is start dumping and the dollar is finished as the Fed will be forced to print so many dollars it will make Mugabe blush.  People need to wake up.

(Mike Krieger, formerly a macro analyst at Bernstein, and currently running his own fund, KAM LP, summarizies the pretend reality we are all caught in now, knowing full well America is set on a crash course with reality at some point, yet sticking our collective heads in the sand, as the collapse will be some time in the “indefinite” future. In the meantime, banks will continue to boost US GDP by peddling “financial innovation” and restructuring advice to countries like Greece… and nothing else.)

Ready for the greatest financial collapse in world history?

This is the ‘Greatest Depression.


China moves on currency after growing US pressure (Telegraph, April 14, 2012):

China took a major step closer to turning its yuan into a fully tradable global currency today, by doubling the range by which it is allowed to rise or fall against the dollar.

The People’s Bank of China said that from Monday it will double the trading band, so that the yuan can fluctuate by 1pc every day from a mid-point, compared with its previous limit of 0.5pc.

The move demonstrates Beijing’s belief that the yuan is now stable enough to handle major structural reforms, despite slowing growth of the Chinese economy.

Analysts said the slowdown may have actually spurred Beijing to make the change, because the Chinese government knew it could introduce the larger band without causing a spike in the yuan’s value.

Read moreChina Moves To Turn Yuan Into Fully Tradable Global Currency

The REAL STORY Your Governments, MSM And The Central Banksters Completely Forgot To Tell You About: ‘The Race To Debase In All Its Glory’ (Chart)

The Race To Debase In All Its Glory (ZeroHedge, Feb. 19, 2012):

Lest anyone forget what the real story is, here is a reminder. Thank you neo-Keynesian economics for making a mockery of non-scientific notation.

China ‘Attacks The Dollar’ – Moves To Further Cement Renminbi Reserve Currency Status

In a surprising turn of events, today’s biggest piece of news received a mere two paragraph blurb on Reuters, and was thoroughly ignored by the broader media. An announcement appeared shortly after midnight on the website of the People’s Bank of China.

The statement, google translated as “Pragmatic and pioneering spirit to promote cross-border renminbi business cum on monitoring and analysis to a new level” is presented below:

Reuters provides a simple translation and summary of the announcement: “China hopes to allow all exporters and importers to settle their cross-border trades in the yuan by this year, the central bank said on Wednesday, as part of plans to grow the currency’s international role. In a statement on its website www.pbc.gov.cn, the central bank said it would respond to overseas demand for the yuan to be used as a reserve currency.It added it would also allow the yuan to flow back into China more easily.”

To all those who claim that China is perfectly happy with the status quo, in which it is willing to peg the Renmibni to the Dollar in perpetuity, this may come as a rather unpleasant surprise, as it indicates that suddenly China is far more vocal about its intention to convert its currency to reserve status, and in the process make the dollar even more insignificant.

International Business Times provides further insight:

This is all part of China’s plan for the internationalization of its currency, which may, in the decades to come, threaten the global ‘market share’ of other currencies like the US dollar.

Previously, China also announced that bilateral trades with Russia and Malaysia will begin to be conducted with the yuan and the ruble and ringgit, respectively.

Other moves on the part of China to internationalize its currency include allowing foreign companies to issue yuan-denominated bonds and relaxing rules for foreign financial institutions to access the yuan.

Read moreChina ‘Attacks The Dollar’ – Moves To Further Cement Renminbi Reserve Currency Status

Bank of India Becomes First to Offer Trade Settlement in Yuan

BEIJING: Bank of India has become the first Indian bank to offer trade settlement facility between the rupee and the Chinese RMB from Hong Kong. This follows intense persuasion by the China Banking Regulatory Commission, which is trying to gain acceptance of the RMB as an international currency.

“We are the first Indian bank to offer real-time settlement facility in RMB to Indian exporters and importers. It will be save a lot of time because settlement in US dollars usually takes three working days,” Arun Kumar Arora, BoI’s chief executive in Hong Kong, said during a recent visit to meeting regulators in Beijing.

Indian buyers are at present making payments in US dollars, and they often have to convert rupee into the US currency for the purpose. The US dollars will no more be the intermediary currency as the BOI is offering direct settlement between the rupee and the Chinese money.

Chinese exporters want their money in the local currency, which is regarded as more stable compared to the US dollar. They are also in a position to have their way because Indian buyers do not have an alternative source of low-cost goods, sources said.

Read moreBank of India Becomes First to Offer Trade Settlement in Yuan

Gold This Decade!!!

Don’t miss:

US DEPARTMENT OF HOMELAND SECURITY HAS TOLD BANKS – IN WRITING – IT MAY INSPECT SAFE DEPOSIT BOXES WITHOUT WARRANT AND SIEZE ANY GOLD, SILVER, GUNS OR OTHER VALUABLES IT FINDS INSIDE THOSE BOXES!

Silver: Shortage This Decade, Will Be Worth More Than Gold (!!!)



Added: 4. February 2011

Related information:

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China Devalues US Buying Power By 30 Percent, Protects US Treasury Holdings

The trade imbalance between the US and China, a hot button between the nations for the last decade or so, is finally going to start to stabilize in the summer of 2011.  However, it is doing so with a de facto devaluation of the US dollar and its buying power.  The average American will see a spike in the price of everything from their favorite jeans and T-shirts, to the cost of some electronics.

The Chinese have decided to devalue the US dollar’s buying power, without devaluing the US Treasury holdings they hold.  It is an elegant solution to their issues.  It will be interesting to see if they can pull it off, while they try to prop up the European Sovereign debt markets at the same time.

The Chinese are attempting, successfully so far, to introduce the Yuan as a global currency in which to settle international trade.  China is pumping into its own internal currency markets so much liquidity, they need an export market to develop for the Yuan or their own internal markets will overheat.

So China is going to start offering Yuan based savings accounts, to westerners as a vehicle in which to park capital.  While this is a test case only, one might expect Yuan based accounts to be offered around the world sooner rather than later.

If western investors take to Yuan based cash accounts as a way to try and gain an increase in value, the transition will drive the western banks to be more proactive in adding convertibility into their systems.  To start, they are offering these Yuan accounts at three US based branches.

The US Dollar devaluation will come in the form of an increase in the prices of all products.  In reality it will represent the uniform cost push effects of inflation.  The US can expect it on all Chinese based products of one form or another.  The timing of the change is set to arrive with the products on the US shores in the summer of 2011.

“They’re going to go home with 35 percent less product than for the same dollars as last year,” particularly for fur coats and cotton sportswear, said Bennett Model, chief executive of Cassin, a Manhattan-based line of designer clothing. “The consumer will definitely see the price rise.”

China has no choice at this stage, but to pass on the cost of raw inflation to its customers.  The era of cheap Chinese imports is over.  The real impacts of higher commodity costs are going to push into the economy at different levels.

Read moreChina Devalues US Buying Power By 30 Percent, Protects US Treasury Holdings

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Russia, China pledge bigger role for yuan, ruble

See also:

China, Russia, Iran are Dumping the Dollar, Buy Gold And Silver



Russian Prime Minister Vladimir Putin shakes hands with his Chinese counterpart Wen Jiabao

SAINT PETERSBURG (AFP) — Prime Minister Vladimir Putin said on Tuesday the Chinese yuan would soon start trading in Russia as the countries seek to challenge the dollar and promote the use of national currencies.

“We agreed to expand the possibilities for application of national currencies during trade and economic contacts,” Putin said after talks with Chinese Premier Wen Jiabao in the former Imperial capital Saint Petersburg.

“Now the ruble started trading on the exchange in China and the yuan trade will begin in Moscow in early December,” Putin said, hailing the move as a “serious step” on the path to strengthening economic ties.

On Monday, China conducted the first yuan trade with the Russian ruble in order “to promote the bilateral trade between China and Russia” and to reduce the conversion cost among other tasks, said a statement posted on the website of the China Foreign Exchange Trade System.

Both China and Russia, which both seek to promote their national currencies worldwide, have called for a revamp of the global financial system in the wake of the global economic crisis, saying there is a need for a new supra-national currency besides the dollar.

Read moreRussia, China pledge bigger role for yuan, ruble

China Inflation May Be Too Hot for Controls

Nov. 23 (Bloomberg) — Standing near his 12-table noodle shop on Beijing’s Yonghegong Avenue, owner Liu Heliang says meat and vegetable prices have climbed 10 percent in a year and staff wages are up 40 percent.

“I’m struggling to make ends meet with costs going up like this,” said Liu, a native of Sichuan province who pays his workers as much as 1,800 yuan ($271) a month, or 88 percent more than the Beijing minimum wage, to serve up a staple Chinese meal. “Raising prices is the only way out,” he said, predicting he won’t be able to hold out beyond two months.

Premier Wen Jiabao’s cabinet last week announced it will sell grain, cooking-oil and sugar reserves, ordered an end to tolls on trucks carrying produce and threatened price controls to rein in a 10 percent inflation rate for food. Because the measures would do nothing to counter the 54 percent surge in money supply over the past two years, the risk is they will prove insufficient to cope with the challenge.

“They are just not addressing the fundamental problem at all,” said Patrick Chovanec, an associate professor at Beijing’s Tsinghua University. With the expansion of credit and cash in the economy stemming from China’s response to the global crisis, “you’re sitting on a volcano,” said Chovanec.

Read moreChina Inflation May Be Too Hot for Controls

A number of the world’s biggest banks back switch from dollar to renminbi for trade

Before you read the Financial Times article below, read this, if you haven’t done so:

Mike Krieger: This Is The Last Dance:

They refuse to allow the yuan to strengthen because they know that once they do that it will mark the real end of the dollar era. So instead they are spending like crazy on infrastructure ahead of them allowing the dollar to plunge.  Then the strong yuan will be employed to purchase all the commodities they need to utilize their infrastructure and the OECD gets priced out. To those that talk about yuan devaluation, you need to be specific.  Devaluation versus what?  Versus commodities generally along with other currencies?  I can buy that argument very easily.  Versus the dollar, highly doubtful.  Why? The latest data says China owns $877.5 billion in U.S. treasuries. All they have to do is start dumping and the dollar is finished as the Fed will be forced to print so many dollars it will make Mugabe blush.  People need to wake up.

(Mike Krieger, formerly a macro analyst at Bernstein, and currently running his own fund, KAM LP, summarizies the pretend reality we are all caught in now, knowing full well America is set on a crash course with reality at some point, yet sticking our collective heads in the sand, as the collapse will be some time in the “indefinite” future. In the meantime, banks will continue to boost US GDP by peddling “financial innovation” and restructuring advice to countries like Greece… and nothing else.)

And what happened to the US dollar since China allowed the yuan to strengthen?!!!

And now Illuminati bank JPMorgan and …


Aug. 26 (Financial Times) — A number of the world’s biggest banks have launched international roadshows promoting the use of the renminbi to corporate customers instead of the dollar for trade deals with China.

HSBC, which recently moved its chief executive from London to Hong Kong, and Standard Chartered, are offering discounted transaction fees and other financial incentives to companies that choose to settle trade in the Chinese currency.

“We’re now capable of doing renminbi settlement in many parts of the world,” said Chris Lewis, HSBC’s head of trade for greater China. “All the other major international banks are frantically trying to do the same thing.”

HSBC and StanChart are among a slew of global banks – including Citigroup and JPMorgan – holding roadshows across Asia, Europe and the US to promote the renminbi to companies.

The move aligns the banks favourably with Beijing’s policy priorities and positions them to profit from what is expected to be a rapidly growing line of business in the future.

The phenomenon will accelerate Beijing’s drive to transform the renminbi from a domestic currency into a global medium of exchange like the dollar and euro.

Read moreA number of the world’s biggest banks back switch from dollar to renminbi for trade