Topic: Russia and others, move to use Yuan instead of dollar. - page 2. (Read 1613 times)

In confirmation of your opinion, I read since two days that the United Arab Emirates agreed with India to complete trade exchange deals between them in rupees, which can be considered an additional step in the same direction, although this is outside the BRICS framework.
And although I am convinced that the global economy in its current situation is unable to completely abandon the use of the dollar, I note that the dollar (the United States) is going through its most difficult period.
The most important question today is what is the really best option for the global economy (I mean in particular global trade exchanges)? I mean, is it good to keep the dollar as a major exchange currency, or will diversifying currencies have better results? Do not forget that the dollar is the supporter of America's position as a global power.

Your assumption that I am a fan of the US and the Dollar is a fallacy
I also have a lot of questions about the US. And I consider the dollar to be the only acceptable currency for international settlements today, purely because of its pragmatic and real advantages.

Regarding the arrangements between India and UAE.  Arrangements can be, and have the right to be, between two countries - it is their right. And I assume it will be a mutually beneficial and partnership. Not like settlements with Russia
I am not sure that ALL groups of goods will be sold to each other for rupees or dirhams. And here again the dollar comes up. Let me explain - in the international market dollar is like money inside the country. Without money in the country begins the most complicated process of barter exchanges or search for a substitute currency. Similarly, in the international market - many goods are produced for the world economy, and the universal measure is the DOLLAR. It is recognized by the whole world, it is secured and stable enough, even in today's time. Having sold any commodity for it, you are sure that you will buy any other commodity in the market without any problems. In case of local sales for local currencies, there is a problem - countries need the currency of international settlements for foreign economic activity. And part of the goods both sides will still sell for the dollar and possibly the euro (the second is a fairly liquid currency). If you remember the example of "rupee-ruble", I did not just bring it up. The situation there has actually reached a deadlock - Russia has huge piles of rupees, and there are no 100% settlements, while the liquidity of the rupee is low. Because Russia cannot buy in India what it critically needs. And India does not want to sell almost anything for rubles, because it does not need a worthless piece of paper from a country with a dubious future. I agree, India-UAE is a different level of relations and economies.

By the way, despite some nuances of recent years, I have great respect for India! History, culture, desire to be leaders, development of space, pharmaceuticals and many other things deserves respect!

Although many people still do not accept the fact that the USD is fighting to lose its position, that is what is happening in the international trade market. Not only the BRICS countries are looking to reduce their dependence on the USD, but many other countries have also expressed support for this.

To be fair, I also believe we won't see a new currency replace USD in the next few years, but USD will be dethroned and replaced by another, that's what will happen in the future. In the history of world currency, there have been 4 other currencies dethroned over time and USD is no exception because that is the rule of the world.

I was initially wondering what could have led to the BRICS bloc refusal by the Indian government not until I peruse through the article . The local currency settlement system Is a good development in the right direction for both India and the UAE in a bid to mutually move their economies. Going through the article it's espoused how the bilateral agreement would greatly lead to a reduction in the dependence of the US dollar which is obvious such economic dependence on the dollar is a control to the pace of development to the third world countries in addition to the continuous devaluation of their local currency's to the dollar that is rapidly becoming a monopoly in itself.

You seem to be a big fan of the US and USD, so there's nothing wrong with trying to protect them, but I think you need to be a bit more realistic. No one is making up a fairy tale about the “harm of USD” but it is happening, and we can feel the reality without being led by others.

According to recent news, India and the UAE have also agreed to eliminate the dollar in trade between the two countries and replace it with rupees and dirhams. And from the above article, we can also guess why India refuses the BRICS bloc when using the yuan, they also want the Indian rupee to replace the USD, not the Chinese yuan.
https://www.deccanherald.com/business/economy-business/india-uae-sign-pact-to-trade-in-local-currencies-amid-pm-modis-visit-1237265.html

India turned out to be the smartest country. India understands perfectly well that the "goal" of BRICS is to put some countries on the yuan, or rather to completely yuanize their economies to save China's economy. After that China will not let them out of its "friendly embrace" and these countries will never be able to be independent in the world market with an open economy and comfortable dollars for all.
As you can see, all the alleged settlements in the national currencies of the BRICS countries are somehow migrating towards settlements in the Chinese yuan. Trace the statistics of the volume of settlements in yuan between the BRICS countries of 5-3-1 years and now, and you will be forced to make a discovery for yourself - there is an overpowering of yuan, substitution of critical areas of exports and imports - for yuan. Someone invented a fairy tale about the "harm of the dollar", now someone will feel the "benefit" of the yuan...But it will be too late

BRICS countries are planning to launch a currency to trade among themselves and with other countries, but at the moment India seems unwilling for this. They are doing this to challenge the monopoly of USD in the near future. Arab countries are also looking to trade in Yuan and it will have a big impact on petrodollars. And we might see a devaluation of USD as it is not backed by Gold.

And you can give facts and arguments that the cheapening yuan, in a country with a real huge internal problem with the economy, and total dependence on the market in the West, and on Western technology, poses any danger to the dollar ?
You probably don't have all the information. I will inform you. After the global crisis (COVID, economic crisis 2019-2022), China has RECOVENED, and began to INCREASE investments in US government bonds, and fill the budget with dollars. By the way, the most interesting thing is about dollars. China is forcing all its "friends" to abandon the dollar (the currency of the international world market) and switch to yuan. But the most interesting thing is that China is implementing a scheme - now we are "friends" for you, we buy for dollars everything you need on the foreign market, and you pay us for it - with your assets, cheap raw materials, let Chinese business into your economy on the most favorable terms. Well, how to buy on the world market, if "foolish friends" remove the dollar from their gold reserves and exchange it for yuan ?
And then China sells the assets of "not smart friends" to the foreign market for.... yes yes, you guessed it - FOR DOLLARS, but much more expensive than they bought them for yuan from "fools". As they say - nothing personal - just business...on fools

with the existence of the digital yuan, Russia has felt leha from sanctions imposed by the US, so now they have used the Chinese yuan and this will be a new threat to the US dollar which used to dominate the world market, so this is one of the ways China develops their economy and we all know that China always competes with economic problems especially in technology, And for military matters, they can't be first yet.

Let's start with a theory, shall we?
Rare earth metals are a group of 17 elements including scandium, yttrium and the lanthanoids (lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium).
Galium and Germanium are not included.
What I agree with, and it is foolish to deny - China is the largest supplier of rare earth metals today. But not EXCLUSIVE.
You can read in open sources, about deposits and mining of this group of metals in the world. Note that until 2000, the leader in mining and production of rare earth metals was the USA.
There are also large deposits in Australia, India, Brazil, India, as well as other countries.
The above-mentioned "problem" concerns only 2 metals - gallium and germanium. But as you know - their production in other countries has been reduced, but not stopped. It was just logical because China started to supply a lot of these metals to the market cheaply. Now other countries will start to increase production of these metals, because there is demand, and there are "restrictions" from China.
In a word - there will be a small adaptation of the market, as a result of which - new and old suppliers will simply appear on the market, with prices a bit higher than Chinese prices. Let me remind you once again - without being a really exclusive producer of some goods on the market, it is foolish to make such steps. China apparently has not studied Russia's experience of economic terrorization of consumers, and may repeat its history in another segment of the resource economy.


PS Regarding dirty air, I also agree. But there are nuances China has never cared about ecology and public health, so they did not use quality technologies to ensure environmental safety...

China made a far-sighted bet on rare earths in the 1980s. Today, China is the world leader in the supply of 17 different rare earth metals with a market share of about 90%. To capture a significant share of this market requires huge investments and years, if not decades of directed efforts. The irony is that rare earth metals, which are actively used in high-tech goods, including for the green transition, are extremely unfriendly in their production, so replacing China on the world market is not only long and expensive, but also very dirty work. The production of rare earth metals is one of the reasons why in some parts of China it is possible to make bricks from the air, it is so dirty. Want to replace China? Good luck.

The reality is a little different.
China is really the leading supplier of gallium and germanium today. This is a fact, I confirm. But I highlighted the word "SUPPLIER" for a reason. The fact is that these rare earths are also mined by other countries. The advantage of China, before the introduction of "licensing", was the extremely low price. But there are deposits of these metals in other countries, and in industrial quantities, with a slightly higher price.
The countries with the largest deposits and commercial production of these metals:
Gallium - Japan, South Korea, Ukraine
Germanium - Canada, Belgium, USA

Yes, they will create a temporary inconvenience, but it's like another "fighter against the world" with "turn off gas to Europe. Remember how it ended? There were "predictions from international analysts" blaring through all the outlets - "Europe will freeze, die out and crawl on its knees". In the end, the EU quietly switched to alternative and adequate suppliers of the "unique product", and ... in the end - the EU has no problems, Russia has lost this market forever.
The same will happen with Galium and Germany - China will simply lose supply contracts, it will take some time to sign new contracts, build logistics schemes, after which China will be told "goodbye our stupid supplier

1. China has an export-oriented economy, that is, China has a positive trade balance. In such conditions, it is beneficial for China to artificially maintain a low exchange rate of the yuan.
2. China is actually a monopolist in the production of a large number of rare earth metals, which are actively used in any high-tech products. This is a strong trump card of China and the answer to the question why it is difficult for any large company to transfer production from China to any other place.

There is a thing that I don't understand. Some years ago I remember Apple or Barak Obama stated that Apple couldn't move factories from China to other country because Chinese laborers were highly qualified, efficient and fast. So, I don't really understand, if America is so dependent on China, why does China heavily invests in U.S. Treasury bonds and makes its own currency weak to keep low export fees? It could profit more if the USA is really dependent on China.
And there is another thing that I personally think is a huge bullshit. Why doesn't America produces goods in the USA? Labor is expensive? Then they shouldn't produce food, shouldn't provide postal service, shouldn't do tons of thing if we think that way. And labor isn't that cheap in China too. I think they are just exploiting their employees and they wont' be able to do the same in the USA. Or may be? Idk, I have heard that Amazon exploits its warehouse and delivery employees too.

Growth? Maybe a picture can help you see this "growth" better.


I don't see "growth" in this year long trend, more like a dead cat bounce. It has to go back to near $1000 billion for it to be called "growth".

This actually looks somewhat like the bitcoin price situation. It has massively crashed down from $70k and has only recently recovered to $30k. We can't say it has "grown" and things are fine until at least we see $50k+. Of course if you zoom in, it would look like "growth"!

That's your statement not others. China never "rejected" US bonds, they dumped it because they wanted to reduce the amount of risk they were taking since US dollar started tanking (crash postponed by hugely increasing interest rates) and US-China are practically in an economic war. This is also not the only thing they did. They've been pulling out of each other's markets for the past couple of years. For example in the most recent news Apple revealed plans to pull a big part of its production out of China and move it to India.

Personal opinion, this step should have been implemented by pacific countries or developing countries for a long time to escape the pressure of the dollar. just remember how George Soros could destroy the countries of Southeast Asia with his cunning tricks. countries should not depend on just one currency for transactions in various countries.

And this is one way to reduce America's domination and hegemony in the world. because America has too often behaved and acted beyond limits and arbitrarily towards other countries that are not in line with it. The Chinese Yuan is slowly but surely being used by the countries of Russia, Iran, Saudi Arabia, the UAE, the Middle East, Indonesia, the African continent etc. That way the dominance of the US Dollar will begin to diminish, this will definitely happen although we don't know when it will work.

Doomsayers cult two years ago:
China is holding all of US debt, US is owned by China, Us puppet of China, US bankrupt
Doomsayers cult now:
China is dumping all of US debt, China no longer holds US debt, US is bankrupt!

Going over the obvious lack of knowledge of what those bonds actually are and what purpose they serve here is a really hard pill for you to swallow:


Simply said, China is just converting treasury bonds to us agency ones because they are offering higher yields.


Oh, and I'm sure every single one of you is going to label this as fake news, even if it comes from the official paper of the CCP.

Meanwhile, how are BRICS currencies doing?
If the USD is dying, why are the BRICS currencies going lower against it?



I would have mentioned also the Iranian rial but that thing went down so bad it's destroying every graphic like the Zimbabwe dollar.

You guys are beautiful ! This was done on purpose, so that you yourself checked the glaring error, and you yourself wrote that the period that you specified - was deliberately "cut" not to show the growth, and then you yourself confirm that the growth is "but in the figure error" !
Thank you for the clarification, you did it perfectly !
Yes, 2 and a small percentage, in two months. And look at the dynamics of "China's rejection of U.S. government bonds" in the period you intentionally chose - virtually identical figures! Thank you again for your accuracy

So, back to the topic, is it still "China's global rejection of US bonds", or is the market situation due to many problems in the world economy, when small parts of the "eggs" are shifted to other baskets ? As you noticed - a noticeable downturn started to show up in 2021-2022. Shall I tell you about the causes and situation of the world economy ? No ? As you can see - the overall picture shows some decline in investment by other countries in the U.S. papers. And it's quite logical, based on the situation in the economy, the next round of "just look at what state debt, there will definitely be a default". Now the situation has stabilized, and the situation begins to change the vector. Countries have started to return money to U.S. government bonds

China is literary the second biggest dumper after Japan dumping a massive $174.4 billion in a year as I pointed out above in details.

$19.9 billion in $849.0 billion is 2.34% increase not 10%!

It is an interesting short term move though, specially since overall move is still dump down from $1033.8 billion.
It could possibly be linked to the interest rate hike in the same period from 4.33% to 4.83% making this move profitable in short term. Which could also explain the stop and the small $400 million decrease on 2023-04.

Dude, lol. You have very serious problems with math, if you see a 10% increase here, try using the help of a calculator.

If you look at the history of China's investment in US Treasury bonds over a longer time period, it turns out that China has been systematically reducing its investment in US government debt for about ten years, while increasing investment in gold. The maximum level of China's investments in US Treasury bonds exceeded 1.2 trillion dollars, that is, over ten years, China has reduced its investment in US government debt by about one and a half times.