China And Germany To Drop Dollar In Bilateral Trade
Since 2007, I have discussed the very real danger of a dollar dump on the part of China. When China finalized bilateral agreements with Russia in 2010, it became painfully obvious that an avalanche of bilateral deals cutting out the greenback were in the making. Apparently 2012 is the year in which they have come to fruition.
The latest news is perhaps one of the most disturbing trade developments initiated by China over the past two years (and there have been many). Germany is the last stable financial pillar of the EU. Where Germany goes economically, so goes all of Europe. A bilateral trade agreement between Germany and China which cuts out the dollar as the world reserve currency bodes ill for the U.S. monetary system. It would seem that the rest of the globe is nearly in position to end the greenback. All signs point to dollar implosion in the near term…
Brandon Smith, Associate Editor
Germany and China plan to conduct an increasing amount of their trade in euros and yuan, the two nations said in a joint statement after talks between Chancellor Angela Merkel and Chinese Premier Wen Jiabao in Beijing on Thursday.
“Both sides intend to support financial institutions and companies of both countries in the use of the renminbi and euro in bilateral trade and investments,” said the text of the statement.
It also said that both parties welcomed investments in China’s interbank bond market by German banks and supported the settlement of business in the yuan by German and Chinese banks and the issuance of yuan-denominated financial products in Germany.
READ MORE HERE: