Topic: Canada joins the dollar dumping team, signs a deal with China to bypass it (Read 5710 times)

LOL true story. This propaganda...mathematically it has another impact.

It is a complicated subject but the Dollar is not invincible, increasing the amount of Dollar of 20% and more every year will have consequences in a world where the US industrial production is an always smaller portion of the World's industrial production every year.

How about actually scientifically and mathematically refuting these claims instead of writing sarcastic American propaganda in one line?

Summary: A bunch of people without economy background writing BS for their amusement of Gloria and Armageddon. Ieeehh.

You have Big non western Nations that have the atomic bomb so a direct war against them is not likely but maybe "side wars" and destabilization as the USD Dollar is fading away as the first exchange currency.

Your lifestyle as american depend directly on the rest of the planet having a need for USD. That need doesn't come in existence by magic (see: Nixon's shock). And that need is fading for some 20 years already, again not by magic (see: Euro 1999, PRC 2007). We have arrived at the later stage in this game, and no solution is available to the USG to avoid the outcome. Not even war. US society can't sustain a war now, it will break apart.

The Real estate bubble and most bubbles are created by the State by law allowing the bubble to inflate with the tax payer money or its liability.
Bubbles in the free market burst early and the bad companies and bad debt is eliminated. The last 15years, Washington has been inflating bubbles not to have a recession and not to lose the next election.

It would be the same under a "free market". I wonder what would you blame then.

The statists will not admit their mistakes and will blame the problems on the Free Market even if there was no Free Market in the first place. They will suggest more Government action.

the dollar pyramid crash,coming soon to your place,with the lessons on democracy and libertarian economics
life quality drop and massive riots
soon on your favourite unbiased tv channels

If the State takes 100 he will give back 40-80 so you lose


Selling then

At one point, the rest of the world will realize consuming and enjoying their own labor are way better off than supporting a dieing currency.

Ok, I just don't like the word "dumping" because it sounds weird in this context..

Buying up things with their USD reserves would be dumping the Dollar; China has a huge surplus and is accumulating Gold, they are producing a lot and it will not change because the Dollar crash

I highly doubt that. The Chinese trade surplus this year is at record levels. There's a debt bubble in the economy. What China does is "export its way" out of a possible crisis.
Also I don't see any sense in "dumping" dollar. It's much better used to invest in overseas expansion.

Cheaper and more efficient way to settle payment.

I don't see why the poor would be hit. Assuming the poor are debtors, they're fine (assuming the economy doesn't sympathetically collapse due to ). Pensioners are screwed if they're mostly holding USD-denom bonds and other USD-denom debt, but assuming they have a diversified basket, at least wouldn't be wiped out.

ETA: I take that back. The government would probably be one of the last to abandon the USD. If welfare amounts aren't adjusted MUCH more frequently than they are now, it could be devastating to the poor and economy at large.

China is already in the situation where it doesn't need to export that much or close to the situation where it can dump the Dollar.

Very bold move by Canada, this will open up a lot of opportunities for them in the future, by being a first mover in North America.

Yep, it's good for the US consumption-based economy. But some people want the economy to rebalance a bit, and I think it's reasonable that the US might want China to consume more.

The US is bitching about the undervalued Yuan but it is a blessing for the US to be able to buy cheap products and it will not last for ever because the Chinese are shifting to having a strong currency, lots of Gold. They will keep producing a lot but they will consume most their products now

Quite frankly, the US debt market is exactly what allows Chinese to keep yuan undervalued by buying dollars.

As long as China wants to be an exporting country, they will have to amass dollars (or any currency of their trading partners), either directly (via CB) or indirectly (via outward private investment).

Economic adjustment doesn't happen overnight. By the time Chinese reorient their economy the dollar exchange rate would have already adjusted.

USG is going to need a "reset" in 2-3 decades, so a crash really wouldn't be that bad, right? It's not like people take on boat-loads of debt, then hold onto the cash - they use it for major one-off expenses, generally. I don't really see why the "dollar" is looked at as something we have to protect, as if it magically *is* the economy. If the dollar died, industry would move on to a new currency, pay off their near-worthless debts (hope you don't have an ARM!), and rev up the economy like it's the WW2 boom again.

However, the US as a whole is in a pretty good position compared to many other countries because while it does hold a lot in debts, it also has an exceptionally high relative amount in free, productive assets which are not currently "taxed into money" (that is, sold to cover taxation). The US government's going to have trouble paying its bills, but if the government's prevented from collecting that from the people and businesses, turning productivity into government expenditure, I think a USD collapse would end up being a net benefit for a majority. The longer we keep tax rates low, the longer we can prepare our industry for the boom, and the stronger it'll be. To get things restarted "right," though, the government will need to start taxing at rates which cover its expenses, and hopefully that comes with some massive budget-trimming and an overhaul of how our legislative system works, where lawmakers stuff hundreds or thousands of unpopular appropriations (and worse) into bills which "must" pass.

I think a lot gold bugs and the like look at things like PMs and recognize how valuable hard assets would be in the event of a USD crash, but then don't recognize how much more valuable it is to have machines and other infrastructure to convert hard assets into something usable -- rather, they undervalue the actual US economy because they spend so much time looking at scary numbers indicating bad times for the USD or USG. A USD crash doesn't necessarily mean there's going to be a US economy crash, as far as the productive, non-parasitic economy's concerned. I could be way off-base, though... I'm kind of trolling just so someone can show me where my thinking's wrong. There're so many variables, it's difficult to get concise explanations.

Explain it more to me, then. I would really like to see economic output statistics to back up your statement:

"this 'majority' of holders doesn't have very much production and wealth coming from their countries"

If this would have been done 10 years ago, the US would have ensured Canada got bitch slapped.

The fact that Canada and the rest of the countries commit to these deals without fear of repercussion speaks volumes.

The question for me is

1.) whether this is in a way co-ordinated globally, a way of 'weaning' off the USD slowly and moving into a new paradigm

Note on #1, China maintains a peg to USD. As US FED tapers big banks take up the slack (purchasing UST in same amounts as Fed cuts) and Japan increases its QE program.

2.) unco-ordinated and privately hostile.

Note on #2, that (geopolitically) Russia reacting to US/NATO encroaching in Eastern Europe has resulted in financial war tactics that are hurting the Russian economy. Ruble is getting belted. Oil, the cost of which is vital to Russia, is also being punished.

I understand your point but not all farmers will survive, importations will slow down and in case of riots and martial law you may not get food easily.

If you have Silver, Gold or Bitcoin you will be able to exchange it against what you need. Having bottles of liquor may help too in some cases.

there won't be any shortage of food, the farmers are still there, the retail stores are still there.
its just they won't accept useless pieces of paper.

If you are thinking about a terrible collapse, alcohol and food can be a good thing to save; having a flat you are renting or Gold in a safe oversea is a good idea too.

If the Yuan rises against the dollar, China will lose its only competitive advantage. All that slave labor won't be so attractive anymore.
I don't see a great drive for the Chinese oppressors to let that happen anytime soon.
Until China gets a decent intellectual base it will be stuck as a low cost producer. They are making progress and have a lot of our cash, but it takes time to build a generation of intelligentsia.

More and more countries entering into direct currency trade with China. It's because they realize the US Dollar (it's actually the Federal Reserve Note) will soon become confetti. If you still want to sell things, watch the big hands at the table.

Every country reserves USD, even Russian! You have to otherwise there will be no imports! As you have to pay them in Dollars!

For a lot of central banks it is not about dumping Dollars but keeping the Dollar and Treasuries reserves to the same value while the total reserves increase and so do the total amount of Dollar that exist so it is very bearish for Dollar and for Treasuries

It does, you're just choosing to ignore it all as I expected and you clearly have an incorrect or very little knowledge of currency history.

There are a very large number of countries that hold US dollars as the majority of their foreign currency reserves. I would say that more countries probably have some level of dollars in their reserves then do not hold dollars in their reserves

Well you asked for it

https://www.youtube.com/watch?v=GxKvTepymxs

http://www.washingtonsblog.com/2013/01/the-real-reasons-that-germany-is-demanding-that-the-u-s-return-its-gold.html

http://nsnbc.me/2013/07/31/mystery-about-germany%C2%B4s-gold-in-the-us-solved/

If you knew anything about history, you'd know that at one time the dollar was backed by a 1:1 ratio of Gold and the same was to be the case for the other currencies and also a ratio on how much of a savers account can be lent out to a borrower. However now there are either very loose limits or no limits at all and we have absolutely no idea where necessarily all the precious metals have gone, even here in the UK Gordon Brown actually sold off 40% of the gold reserves so we don't know where that's gone off to either and as I said before Germany is trying to get it's gold back. Switzerland is also having a vote on the repatriation of it's gold to get it back because all the countries are now realising what America is up to and they're trying to find out what happened to their precious metals.

http://www.bbc.co.uk/blogs/legacy/thereporters/robertpeston/2008/03/gold_and_gordon_brown.html

ooooo! Found this little gem I'm going to do more background research on, gold reserve act of 1934

http://en.wikipedia.org/wiki/Gold_Reserve_Act

Got any sources for this ridiculous statement?

The problem is this 'majority' of holders doesn't have very much production and wealth coming from their countries so all they're really holding is paper, America took the gold of most of these countries ages ago in return for USD.

Is there a dollar dumping team?
Looking at the USD reserves held outside the US, I think they are easily outnumbered by the dollar hoarding team.

I guess this depends on your definition of "soon". Both Canada and China still deal in terms of US dollars with their trade with other countries and both hold massive amounts of dollars as their own foreign reserves (especially China, to the tune of trillions of dollars).

he is out of words i suppose.

Why is it that you are unable to answer the questions I pose to you?

Yeah - the problem here is that this particular "outlier" has the largest GDP of any economy in the world at $17.6 trillion (or 16.48 percent of the world’s purchasing-power) (source:- the IMF).


    Even putting the CNY aside, on a trade weighted USD index against all major currencies (based on a value of 100 in March 1973) the dollar has dropped from a peak of 143 in March 1985 to a present value of 82.5 !  (source :- [id]=TWEXMMTH]The Fed Reserve Bank of St Louis ).
     WTF is going on here - I dunno    Looks like China might not be such an outlier after all (I could be wrong but I don't think the major currencies above included CNY in the calcs)



    Many economists have even conjectured that the Euro could take over the USD to become a world reserve currency, given that the value of euros held in foreign government reserves nearly tripled, from $393 billion to $1.45 trillion between 2008 and 2013  (source IMF COFER table)


   The US is living beyond its means - it could manage to sustain its inflated standard of living in a world where its "means" were augmented by its world economic (and military) imperialist dominance.

    But those days have come and gone.

    Russia, for eg. (who you wrote off above "Russia doesn't really matter for a myriad of reasons" ), managed to quell US ambitions on Iranian oil via a prospective conquest of Syria. Even the Ukraine has gone tits up for the US (and they've had designs on it for at least a half century (Source:- Kim Philby, My Private War, 1967)) - especially since the strategically important Crimea voted overwhelmingly to stay a part of Russia. Maybe Russia is slightly more significant than you give it credit for  
    And the US game of making loans to developing countries in order that they build roads (built by US firms, so thereby ensuring that USD never actually leaves the US), charging interest rates to put the developing countries natural resources at the beck and call of the US kleptocracy (Source,John Perkins, Confessions of an econominc Hitman, 2006 ) , well, that game has been mastered by the Chinese TBH.



    The Chinese have said that if the US doesn't reduce its debt it will start offloading its US Treasuries/bonds - and when their export markets have expanded and domestic demand has grown they might well be in a position to do just that. Even the odd threat of it causes the dollar to plunge.  

They aren't bluffing - and if/when they do, lets come back here and talk about US inflation rates.

Except I won't be doing it with you cos you're a troll and you are now ignored.

Yeah, that's pretty much the gist of it. When the USD is holding value versus 9/10 currencies the trend is that the outlier is rising against the dollar, rather than the dollar falling. That's simple statistical analysis.

That isn't my argument, never was. Can you show me where I said this?

You've never mentioned this before, can you show me where you did?

You've summed up your replies pretty well, yeah.

Cool, go for it. I'm not going to hold a currency as an investment, though. That's pretty stupid.

P.S. Data and analysis are your friends, not random internet articles and searches.

You argued that QE/trade deficit etc hasn't devalued the dollar - I said, but it has devalued 25% over 10 years against CYN - you say thats crap, its the CYN thats appreciated against the $  , and the $ is holding up just fine against the national currencies of its colonies 

You argue that there is now no significant inflation in the US and so therefore there never will be - I ask you to consider the situation should China start dumping US treasuries /bonds on top of the Fed trying to frantically print its way out of trouble - you tell me to quote sources etc

Bluster/blah blah/bollocks and more bluster.

But you know what - I think you are right. Today I'm going to sell up and go all in on the USD.

How about you ?


ps. Google is your friend.

It will be convenient for people in Canada to invest on Chinese Market and it is a boon for Canada, because China is an big country of export and import with huge consumption customers.   

Only if they allow new competitors to grow and compete in the sphere
Aka don't overburden them in regulatory oversight because they have to appeal to the big bankers or corporations entrenched in the system
Could look at the whole New York Bitcoin regulations as an example of that problem.

A more accurate way of saying it is that the yuan has risen against the dollar, as the dollar has stayed pretty consistent versus a wider array of currencies.
Right, so again the trend would appear to be that the yuan is rising in value as opposed to the dollar falling.

So, here again, it's the same thing. I don't think you understand what you're arguing.

Where is the inflation? I have already asked and you can't provide answers. Where is the inflation that was supposed to accompany QE and the money supply increase?

Maybe you'll continue to dodge answering my questions and providing sources. Maybe you can keep repeating the same nonsense till you legitimately believe it. Maybe you'll spend the majority of your life waiting for the collapse, spreading FUD on internet forums. Or maybe you'll realize this crap is considered a fringe belief for a reason.

Zimbabwe currency

I have a one hundred trillion dollar note taped on my refrigerator.
People ask about it all the time and argue that theres no way it's real or that and that it could never happen in the states.

   

    The dollar has dropped 25% over the last 10 years against Chinese yuan. Just depends what you want to compare it against I suppose. If you were to look at USD against the Euro (Greece, Spain et al), then yes, its probably holding up OK - or against Zimbawain dollars.
      (The Euro has also declined against CNY by a similar rate to the USD BTW - a pattern emerging here  )

     Maybe you are right mate - maybe the US military complex can prop the US up at current levels for another generation. Maybe, in spite of massive QE, inflation won't kick in. Maybe Russia/China and friends will continue to be happy at indirectly propping up the US by using USD in international trade. Maybe China will have continued confidence at the prudent and judicious handling of the US economy by TPTB - and so decide not to slowly offload its debt, thereby plunging the US into turmoil. Maybe inflation will kick in and erode your debt away.

   Maybe future generations won't have to pay the debt.

Maybe the moon is made of green cheese-

       

+1000

People here in America will only wake up when it's too late. The media here has truly skullfucked a majority of it's citizens. It will be the same pathetic look on everyones faces just like when the stock market collapsed in 2008. "The OMFG HOW COULD THIS HAPPEN, IVE WORKED SO HARD AND PAID WHATS HIS NUTS SO MUCH MONEY AND NOW EVERYTHINGS GONE." then America will do what it does best. Rebuild.

Sure, pretty well documented.

Why is this inevitable? Why would the USD lose reserve currency status?

Why does this matter? If your fears were accurate, wouldn't the rise in money supply correspond to ballooning inflation? Where is the inflation?


Not sure what his has to do with the dollar. There will always be competition. This just seems like vague fearmongering. "CHINA RUSSIA INDIA" So what? What are the exact concerns? How will these rising powers impact the U.S.?

Wouldn't that mean the dollar was losing value? If the U.S. were living beyond its means you would see competitors and exporters accepting fewer dollars overall, or valuing the dollar lower. The opposite is happening. I think you've just arbitrarily decided this is the case, when the economic inputs would suggest the opposite.


Why? If we can budget it every year, we can keep affording it. The fact that it is a high overall percentage of the worlds spending isn't relevant, aside from creating a false dilemma.

AND THE SEAS SHALL RUNNETH OVER AND THE STARS SHALL FALL FROM THE HEAVENS!

You just sound like a Sunday preacher who doesn't have any facts so he relies on dramatic predictions. HALLELUJAH!

That's cool, I just disagree.

Yeah, I don't think the federal debt matters. The way our system is structured it basically doesn't matter. We owe most of it to ourselves, so it isn't like normal debt. People, especially on the internet, throw debt around as though it is all the same; it isn't.

   Well, when combined with the $16,000,000,000,000 of Government debt, the slow but inexorable/inevitable drift away from USD as world reserve currency, the printing of $ bills as if they were going out of fashion, the growing power of China/Russia/India on the world stage and as competitors for diminishing and scarce natural resources - when combined with these factors the trade deficit figures pretty succinctly paint a picture of a country living beyond its means.

    And there's only so long you can sustain that $700 billion p.a. military spending - right ? Thats 40% of the worlds total spending on the miltary FFS.



   Generations to come will be paying for the debt that your corporate overmasters and their political bitches are currently running up on your account.

  Thats my take on why its significant anyhow.

What ? - don't you think this debt matters ? It'll all come out in the wash ? 

Why?

Also, his assertion wasn't that it was significant, rather that the U.S. doesn't produce much. Which, from your link, is born out as false as the U.S. exported almost $200 billion.

Yes - so long as Europe continues to play ball - it might be dancing to a different tune this winter, though, when the gas supply dries up



The United States recorded a trade deficit of $43,030,000,000  in September of 2014.
Seems pretty significant to me.

LOL! When did you challenge my opinion? All you did is make assertions, that's not challenging them.

So, put your head in the sand when anyone challenges your opinions? Typical

Running around in a panic? I've calculated this, all that's left for me now is to accumulate as many Bitcoins, Gold and Silver and in my case Gemstones as I can and I'll be pretty damn secure, it's the poor sods who actually listen to people like you who are in denial about the state of the economy that I'm worried about.

I could go through all the detail of the money supply and how currency is created but I seriously doubt you're going to pay any attention to that.

So, this is basically just FUD.

Let's go one at a time.

Canada isn't dumping the dollar, that's not what is happening. The title is misleading, intentionally.

Sure, both countries have an interest in the U.S. dollar losing reserve status. Russia doesn't really matter for a myriad of reasons; isolation, sanctions, lack of access to capital markets, stalling economy, etc. China has a strong interest in weakening the dollar, definitely.

Literally the rest of the world. You named two countries dude. Seriously, who else?

Who?

Consequently, you have folks online who read enough crappy "news" stories and think the sky is falling. What are the stats on America's imports and exports by the way? Especially in relation to others? I'd like to see how little it is.

Dieing from a thousand cuts is not intended to be fast.

But there is an inverted network effect there:
everyone leaving the $ take away more and more appeal to stay there from the others.

It is not the initial worth of the deal that matter, it is how fast the worth go up in time.
USD 2.5 billions is a drop in the ocean, but a storm is made off of drops
Now direct commerce is more efficient between China and Canada, so it can increase at the expenses of the US.
Now a country willing to commerce with China can use US or CANADA $ or € or Yen.
So a country selling stuff to Canada can acquire canadian $ and use them to buy stuff in China.
This also reduce the need of USD for others.

Obviously, Bitcoin will eat the lunch of all of them, just give it time.


 

There are many examples of first world currency that went from #1 to not being used much in a very short time without having a WW.
The American Dollar is massively overvalued and can loose quickly its reserve currency status, especially if more and more Dollars are printed out by the FED and the Forex players shift to not using that many Dollar in reserve or to exchange.
It could be a slow change, a change in a few years or a violent change but it will happen soon enough; the USA are not even the biggest economy, they are only second to China in terms in PPP and their huge debts and massive State to feed are going to kill the Dollar and shattered the Economy.

It's not the currency swap that's the problem for America, it's the fact that they're planning to dump the dollar, China has been planning it for awhile now and Russia is openly talking about it, who else is left to hold it? You also have various countries trying to get their gold back, the "Fuck yeah America!" types just simply don't understand how money is created and works or for that matter how little America actually produces and exports.

Ok, so how much is this currency swap between Canada and China worth total, and as a percentage of dollars held as reserves in Canada?

because once no one holds it in their reserves because they can just trade directly using their own national currencies people will dump it on the open markets creating massive inflation in America.

15 years I bet. Just look at USA enormous debt. Good luck with that. And it is still growing!

He's deluded. The dollar is not becoming useless SOON. How can it go from #1 currency in the planet by a large margin to "useless" soon? That would mean an insanely big crash that would turn into WW3 minimum, and that is not going to happen. If the dollar crashes, it will be a gradual crash.

Can you explain why the dollar will become useless?

Surely it is just a scratch for the USD.
But the number of scratches is starting piling up.
At some point, if you have enough scratches, it is no so different from being skinned.
It is just slower and less painful.

I'm sure that's what you'll say when all the other European countries abandon you as well

at this pace dollar reserves will become useless real soon and will be dumped.
thats when America gets to import its inflation back.

I think it is not about dumping dollar, just bypass the dollar and exchange between Canadian dollar and Renminbi directly. It shows the China is becoming one of Canada's biggest business partners and eliminating the trading obstacle.

Alternately, this swap represents a tiny fraction of business transactions and has no impact on the U.S. or the dollar.

That's so undemocratic on the part of Canada, it should be punished.

Nothing more funny than Americans in denial about the state of their economy.

There is more effect to it than that since it skips the step of using the US dollar as a reserve currency
Since China accepts Canadian directly their is no fees for sending money back to the USA eventually.

Authorized by China's central bank, the deal will allow direct business between the Canadian dollar and the Chinese yuan, cutting out the middle man — in most cases, the U.S. dollar.

There is no real effect to the dollar. If someone were to sell Canadian dollars for us dollars then buys RMB, then the other person were to sell the RMB for us dollars then sell these for Canadian dollars then the net effect on the US dollar is zero

More propaganda. This is a tiny little fraction of Canada's total exports/imports, no real consequence.

http://www.cbc.ca/news/politics/canada-china-sign-currency-deal-aimed-at-boosting-trade-1.2828707

after the EU, UK and Russia Canada joins the club and does a currency swap with China to trade directly CAD - Yuan without using USD.