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This morning’s collapse in the dollar – the biggest daily drop since March 2017 – has extended the 2018 demise to 3.2%, the worst start to a year since 1987.
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Less than a day after President Trump slammed Pakistan on Twitter for failure to combat terrorism, stating, “It’s not only Pakistan that we pay billions of dollars to for nothing, but also many other countries, and others,” and after it was revealed that the US will withhold $255 million in aid, Pakistan’s central bank announced it will be replacing the dollar with the yuan for bilateral trade and investment with China.
“SBP has already put in place the required regulatory framework which facilitates use of CNY in trade and investment transactions,” the State Bank of Pakistan (SBP) said in a press release late Tuesday, ensuring that imports, exports and financing transactions can be denominated in the Chinese currency.
“The SBP, in the capacity of the policy maker of financial and currency markets, has taken comprehensive policy related measures to ensure that imports, exports and financing transactions can be denominated in yuan,” Dawn news, Pakistan’s most widely read English-language daily, announced while quoting the SBP press release.
Since The Fed hiked rates for the 3rd time this year, the dollar has collapsed and gold has soared…
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All Empires have collaborators and accomplices.
Creditors, vassals, and partners will play ball with the Empire if they see it in their interest to do so.
But once the Empire over-stretches militarily or financially (or both) the search for the exit door begins.
Ron Paul discusses the race to get away from the dollar on today’s Liberty Report…
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“We are examining the use of yuan instead of the US dollar for trade between the two countries,” the minister told the media after the official launch of the Long Term Plan (LTP) for the China-Pakistan Economic Corridor (CPEC).
— RT (@RT_com) December 18, 2017
Bilateral trade between Pakistan and China was worth $13.8 billion in 2015 to 2016, a decade after the countries signed a free trade agreement. Pakistan will continue to use the rupee domestically, according to Iqbal.
In 2016, 24,338 tons of physical gold were traded, which was 43 percent more than in 2015, according to Claudio Grass, of Precious Metal Advisory Switzerland.
Gold moving from the West to the East
“We have to put the BRICS initiative into a broader context. It is just part of a geopolitical tectonic shift which started decades ago. We have seen a constant outflow of physical gold from the West to the East. At the same time, the West has lost the economic war, and as a consequence, the focus now turns to the financial system. China dominates the world economy and has displaced the US as the world’s most formidable economic powerhouse,” he told RT.
The creation of a new gold standard by BRICS is also a step to end the US dollar’s domination of the global economy
The more Washington lashes out in anger at those who will not bow to the unipolar world order, the more the rest of the world fights back. As the launch of its Yuan/Gold-settled oil futures looms, China is escalating its de-dollarization scheme further by seeking a bilateral rial-yuan agreement with Iran.
As a reminder, nothing lasts forever…
The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.
“The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank.
“The solution to this is to replace the national currency with a global currency.”
The writing is on the wall for dollar hegemony. As Russian President Vladimir Putin said almost two months ago during the BRICs summit in Xiamen,
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Many readers are familiar with the original petrodollar deal the U.S made with Saudi Arabia.
It was set up by Henry Kissinger and Saudi princes in 1974 to prop up the U.S. dollar. At the time, confidence in the dollar was on shaky ground because President Nixon had ended gold convertibility of dollars in 1971.
Saudi Arabia was receiving dollars for their oil shipments, but they could no longer convert the dollars to gold at a guaranteed price directly with the U.S. Treasury. The Saudis were secretly dumping dollars and buying gold on the London market. This was putting pressure on the bullion banks receiving the dollar.
Confidence in the dollar began to crack. Henry Kissinger and Treasury Secretary William Simon worked out a plan. If the Saudis would price oil in dollars, U.S. banks would hold the dollar deposits for the Saudis.
H/t reader squodgy:
“Something to quell the froth of ignorance.”
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