Friday, May 29, 2015

China on the edge of becoming full fledged trade currency with IMF acceptance, meaning potential end to the dollar

Over the past three years the Chinese Yuan (RMB) has grown as a global trade currency from a starting point of around 3%, to its current level of over 12%.  And with 60 central banks around the world investing in the Yuan, and 30 nations having direct currency swap lines for the RMB, China is right on the cusp of exploding into a full fledged trade currency to not only compete with the dollar, but to summarily end its reign as the global reserve.
In fact, China is so close to achieving this goal that America’s reign over the reserve currency may hinge on the IMF’s upcoming decision to allow the Yuan to be part of its SDR basket, which would facilitate the spreading of Yuan based bonds to all corners of the financial system.  And if this happens, the majority of global trade partners, especially those in Asia and Eurasia, are prepared to completely divest themselves from the dollar and begin a new environment of direct bi-lateral trade using no middleman at all.


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