munKNEE.com Your Key to Making Money
Finance executives in Asia see the writing on the wall. They can see that the dollar is
in a period of terminal decline, and that the Chinese renminbi is going to take tremendous market share away from the dollar – and they want a big piece of the action. To that end representatives of the Hong Kong Exchange and the Singapore Exchange, THE two dominant financial centers in Asia, have signed an agreement to combine their forces in rolling out more financial products denominated in Chinese renminbi. This has massive consequences for the global financial system – and the future of the U.S. dollar.
So says Simon Black (sovereighnman.com) in his (paraphrased) introduction to an article entitled Yet another massive nail in the dollar’s coffin. Hat Tip to Arnold B
[The following is presented by Lorimer Wilson, editor of www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here). The excerpts may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Black goes on to say in further edited excerpts:
The renminbi has already surpassed the euro to become the #2 most-used currency (8.6%) in the world when it comes to trade settlement, according to a report released yesterday by the Society of Worldwide Interbank Financial Telecommunication (SWIFT). The U.S. dollar has the lion’s share of trade settlement (+80%) but just look at how quickly the renminbi has grown; in January 2012, its share of the global market was just 1.9% so it has grown by nearly a factor of 5x in less than two years and, with today’s agreement between Hong Kong’s and Singapore’s financial exchanges, that growth will likely accelerate.
As we’ve discussed before, the dollar is in a unique position simply because it is the world’s dominant reserve currency. When a rice distributor in Vietnam does business with a Brazilian merchant, they close the deal by trading US dollars with each other… even though neither nation actually uses the dollar. It’s been this way since World War II, simply because there has been such a long tradition of trust in the United States, and a steady supply of dollars throughout the world, but this confidence is fading rapidly as merchants and banks around the world have been seeking alternatives, primarily the Chinese renminbi.
As the dollar’s market share in international trade decreases, it will mean the end of US financial privilege. No longer will the U.S. be able to print money without repercussions and, as so many other nations have learned the hard way, when you print money with wanton abandon and indebt your nation to the hilt, there are severe consequences to pay.
Today’s move between Hong Kong and Singapore gives us a glimpse into this future. We’ll soon see more financial products – oil, gold, Fortune 500 corporate bonds, etc. denominated in renminbi and traded in Asia and, as trade in these renminbi products grows, the dollar will be closer and closer to its reckoning day.
Years from now when this has played out, it’s going to seem so obvious. Just like the post-Lehman crash in 2008, people will scratch their heads and wonder– ‘why didn’t I see that coming?’…Duh. Same thing. People will look back in the future and wonder why they didn’t see the dollar collapse coming… why they didn’t recognize that it was a bad idea for the greatest debtor nation in the history of the world to simultaneously control the global reserve currency…
The warning signs are all in front of us and today’s agreement between Hong Kong and Singapore is one of the strongest signs yet.
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
*http://www.sovereignman.com/finance/yet-another-massive-nail-in-the-dollars-coffin-13241/ (© Copyright 2013 Blacksmith PTE,LTD. All rights reserved)
Related Articles:
1. Gold Setting Up To Bottom; U.S. Dollar Setting Up to Crash
The next black swan is already staring us in the face. It’s out of control currency debasement and it’s going to be a collapse in the purchasing power of the US dollar. [After all,] does anyone seriously think that we can print trillions of dollars out of thin air for five years and not eventually have something bad happen? Read More »
2. China’s Reining In of U.S. Treasury Purchases Will Precipitate U.S. Dollar Collapse
The People’s Bank of China is reported by Bloomberg to have said that it will rein in dollar purchases as the country no longer benefits from increases in its foreign-currency holdings…What implications will this have? I believe that we’ll see the start of a U.S. dollar collapse. Here’s why Read More »
3. The U.S. Dollar Will Collapse When This Upcoming Event Happens
If we want to better understand the answer to the elusive question of “When will the fiat US dollar collapse?”, we have to watch the petrodollar system and the factors affecting it. Read More »
4. What Would USD Collapse Mean for the World?
I came to the conclusion several years ago that it was just a matter of time before the world realized that the relative functionality of the U.S. dollar was about to go belly up – to collapse. [Below is an explanation as to why I have come to that conclusion and what I think it would mean for the well-being of the world.] Words: 881 Read More »
5. Shift From U.S. Dollar As World Reserve Currency Underway – What Will This Mean for America?
Today, more than 60% of all foreign currency reserves in the world are in U.S. dollars – but there are big changes on the horizon…Some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade…[and this shift] is going to have massive implications for the U.S. economy. [Let me explain what is underway.] Words: 1583 Read More »
6. This Proposed Law Would Ban Use or Possession of U.S. Dollar in Russia
If the U.S. national debt continues to grow then the U.S. dollar system will collapse in 2017 suggests a Russian lawmaker in submitting a bill to the country’s parliament that would ban the use or possession of the American currency. Read More »
The American dollar will be overthrown…in as short a period as 5 to 10 years says one analyst while another believes it will happen as early as 2015, 2016 latest. Here’s why. Read More »
8. The Collapse of the U.S. Dollar is Unavoidable! Here’s Why
9. China Converting U.S. Dollar Debt Holdings Into Gold At Accelerating Rate
China, Russia and other nations are exiting their dollar-denominated holdings in favor of gold. This action should put pressure on the dollar and U.S. treasuries, pushing not only central banks, but mainstream investors towards the safety of precious metals and other tangible assets that cannot be defaulted on. There will be a rush out of dollars and into assets with no counter-party risk, it is just a matter of how soon it happens. Read More »
10. The Beginning of the END for the U.S. “Petrodollar”!
A major portion of the U.S. dollar’s valuation stems from its lock on the oil industry and if it loses its position as the global reserve currency the value of the dollar will decline and gold will rise. Iran’s migration to a non-dollar based international trade system is the testing of the waters of a non-USD regime…transition to a world in which the U.S. Dollar suddenly finds itself irrelevant. [Let me explain.] Words: 1200
We are witnessing a financial War where China is now adding allies to circumvent the use of the US$, which makes China’s currently even more valuable! Every trade that happens without theUS$ will only make the next trades easier to do. China now has the global reach to undercut just about any trade and they have continued to add to theirPM stocks while at the same time helpping to lower the value of PM worldwide.
It may sound counterproductive but from China’s vantage point, depressing the value of PM’s now, only allows them to acquire more at better prices while at the same time acknowledging that what is low today (for PM’s) can become much higher tomorrow.
When the correction come (aka the fall of the US$) look to PM’s to be THE commodity to have!