Saturday, November 27, 2010

China And Russia Agree To Trade Without The Dollar

We have been writing for years that we are likely to see a coming change in the foreign exchange market.  These events happen every thirty or so years as politics or fundamentals force change into the system and we are overdue.  And I wrote that I personally wish to see the dollar no longer used as the world’s reserve currency.  The concept of a reserve currency is a barbaric relic of control and power from the days of imperialism.  Changing the dynamic of a reserve currency will choke off the American war machine, limit Wall Street’s criminal activity and put an end to neoliberal globalization.  Of course, the yuan or the ruble or any other corrupt currency shouldn’t be a reserve currency either. 

I have written that I believe the best foreign exchange medium is to be direct exchange between trading countries.  There may be other solutions but that is exactly what China and Russia are doing with this announcement.   Of course, this change, if successful on a broader scale, brings an entirely new dynamic to the table.  A dynamic that will lead to the revitalization of the United States’ economy.  Remember, on here, we have said the U.S. will lead the world out of this mess and will more than likely re-assert economic dominance not seen in decades….   That isn’t an opinion.  It’s a calculated bet that coming events will force drastic changes that I believe are self-evident to the search for truth (which we will eventually get to)  and must be made for economic recovery.  All in due time.  First we need to watch the corrupt elites and political idiots send shock waves of economic depression through the global economy to force the changes necessary. 

Russia and China are cutting off their nose to spite their face.  I’m quite certain they have not thought this through.  But then this is a political decision by countries with enormous concentrated political power so why would they?  Politics is all about control.  Yes, this has the effect of limiting the stranglehold on the corrupt Washington and Wall Street use of dollars to manipulate global trade, global control and global politics, but in the end, there will be economic hell to pay for both China and Russia if they are successful and if this new dynamic of direct global exchange spreads.   And as a person who supports freedom, democracy and the rule of law, I have to say I hope they are successful for the right reasons.  ie, For those who seek honest and just economic opportunity and the spread of democracy.   If successful, this will actually drive a stake through the corrupt political systems in both Russia and China or force them to return to a more autocratic or plutocratic state as the fruits of their ill-thought decisions take root. 

As I wrote on here long ago regarding the desire of other countries to see a change in the foreign exchange market and a more limited use of dollars in foreign trade – be careful what you wish for.

posted by TimingLogic at 9:44 AM

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