The Stench of US Economic Decay: Russia and China Dump the US Dollar

[Albertabound]

On Thanksgiving eve the English language China Daily and People’s Daily Online reported that Russia and China have concluded an agreement to abandon the use of the US dollar in their bilateral trade and to use their own currencies in its place. The Russians and Chinese said that they had taken this step in order to insulate their economies from the risks that have undermined their confidence in the US dollar as a world reserve currency.

This is big news, especially for the news dead Thanksgiving holiday period, but I did not see it reported on Bloomberg, CNN, New York Times or anywhere in the US print or TV media. The ostrich’s head remains in the sand.

Another instrument of American financial hegemony is the IMF. Whenever a country cannot make good on its debts and pay back the American banks, in steps the IMF with an austerity package that squeezes the country’s population with higher taxes and cuts in education, medical and income support programs until the bankers get their money back.

How long before more countries join in?

 

[bill barilko]

China owns a lot of US debt and other assets-the idea that they'll somehow cut it all loose is idiocy.

 

[Albertabound]

China owns a lot of US debt and other assets-the idea that they'll somehow cut it all loose is idiocy.

It states that "bilaterally" China and Russia will stop trading in US dollars.

 

[Highball]

Waitr until China comes calling wanting to have the US redeem the Bearer Bonds China now holds. If the truth were known the US citizen is now working for China. Over 15% of the US income is now being paid out yearly to service the Bond Indebtness to China. I'll bet several third world Asian nations will soon follow suit. Brunei may come soon.

 

[Bar Sinister]

Waitr until China comes calling wanting to have the US redeem the Bearer Bonds China now holds. If the truth were known the US citizen is now working for China. Over 15% of the US income is now being paid out yearly to service the Bond Indebtness to China. I'll bet several third world Asian nations will soon follow suit. Brunei may come soon.

Are you sure of that? Current US debt is about $14 trillion with less than a trillion of that held by China. Given an interest rate of about 5% that would be less than $50 billion in interest which is only about one-sixtieth of the 2010 federal budget.

Most of the US debt in fact is owed to Americans and as a result is not quite as serious as it might be. Internal debts keep the money in the country so it is the external debts that are the real problem. In that sense the money the US borrowed from China is of some concern, however, far from the US worrying about China over the debt issue; China should be worried about the US, because it is the US who holds the cards in this scenario. After all, if the US defaults it is China who will be left holding the bag.

 

[petros]

It's time we used our dollars to sell energy. When Fire Departments in L.A. are using a firefighters boot to panhandler in morning traffic to buy parts and fuel for the equipment it's beyond logical to say complete collapse is imminent and our product exported needs to done so in cash, our cash, not paper cash but gold coins in multiple dominations.

The Chinese govt instructed citizens to take their savings out of paper and buy and hold silver.

Do you really want to see economic shift that will secure your future without inflation eating us alive and freeing us from foreign debt?

We need a gold backed public currency issued by Parliament through the Bank of Cananda (after we fire the guy from Goldman Sachs that is running it) or we'll only be nailed by skyrocketing consumer cost thanks to all this BS inflation in the US.

Wake up boys and girls.

The winds of war have shifted to a storm.