China's Petro-yuan Already Gaining Traction
Already -- even before Saudi Arabia and OPEC make their move -- the "petro-yuan" is gaining traction. The Bank of Russia and People's Bank of China have agreed to trade completely outside the US dollar. Singapore, Malaysia and Qatar have also agreed to currency swaps with China. In the case of Qatar, the deal establishes China's direct trade with an OPEC nation -- in the very heart of the petrodollar system. Even Canada, our friend to the north, recently signed a currency swap with China! According to the CBC, "The deal will allow direct business between the Canadian dollar and the Chinese yuan, cutting out the "middle man," i.e. the US dollar." In total, 24 countries have signed deals like these with China in order to drop the US dollar. Consequently, the petrodollar is on its way out.
Still more reportage on these developments
America's European "Allies" Desert Obama, Join China-led Infrastructure Bank," according to Tyler Durden (at ZeroHedge.com), who reports the story this way:
"It appears the sea of de-dollarization has reached the shores of Europe. With Australia and UK having already moved in the direction of joining the China-led Asian Infrastructure Investment Bank, the Financial Times reports that France, Germany, and Italy have now all agreed to join the development bank as 'pivot to Asia' appears to be Plan B for Europe. As Greg Sheridan previously noted, "the saga of the China Bank is almost a textbook case of the failure of Obama's foreign policy," but as The FTconcludes, the European decisions represent a significant setback for the Obama administration, which has argued that western countries could have more influence over the workings of the new bank if they stayed together on the outside. As Forbes notes, this leaves Obama with three uncomfortable options:
As The Financial Times reports, "France, Germany and Italy have all agreed to follow Britain's lead and join a China-led international development bank, according to European officials, delivering a blow to US efforts to keep leading western countries separate from the new institution.
"The decision by the three European governments comes after Britain announced last week that it, too, would join the $50-billion Asian Infrastructure Investment Bank, a potential rival to, and even replacement for, the Washington-based World Bank.
The European decisions represent a significant setback for the Obama administration, which has argued that western countries could have more influence over the workings of the new bank if they stayed together on the outside and pushed for higher lending standards.
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