Thursday, November 25, 2010

Rubles and yuan and greenbacks, oh my!

The other day, China and Russia reached an agreement to stop using the US Dollar for poker chips at their weekly card games. Panic ensued in the more panic-prone corners of the intertubes.

Zero Hedge counters with the fact that both nations are still sitting on mattresses full of greenbacks, which they have no desire to turn into toilet paper yet, and that China does quite a bit less business with Vladimir Putin than it does with Mike Duke, so the sky's hardly falling here. Yet.


(H/T to Mr. B.)

4 comments:

AM said...

China doesn't want to make it's own dollar reserves worthless. Unfortunately if we make their dollar reserves worthless China can make our situation even worse with the economic bomb they have.

All this posturing with China is them reminding us to not do stupid crap with our currency. Unfortunately no one seems to be listening.

D.W. Drang said...

Maybe if we get some adults in charge.

Please note that I did not say "When."

Desertrat said...

Trouble is, China and Russia are not alone in wanting to get away from settling transactions in US $$$. We're lucky for now that the Eurozone is in such deep doo-doo that the Euro won't work.

China's also working with Brazil on direct exchange. When you add in all the contractual arrangements being made for oil and other commodities, it looks to me as though our own monetary and trade policies are killing us in world markets, whether buying or selling.

"Too Stupid for Arby's" is not reserved for the TSA alone...

Graybeard said...

Back around '04 or '05, when I was starting out with home machine tools, I read about Chinese agents coming into scrap metal yards in the US and buying everything - aluminum, steel, copper, you name it. Within the last year, I've read that China isn't buying metals, they're buying mines around the world. Yes, they have mattresses full of dollars, and plans to empty those mattresses without collapsing their value. Their main concern is that we're collapsing the value of those dollars as a way of re-valuing their currency.

Sort of like making someone bend to your will by holding a grenade with the pin pulled and threatening to blow up both of you.