Sunday, 07 June 2020


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Pekin and Moscow "undermine the dollar "

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China and Russia joined to fight the dollar as reserve currency par excellence. This judgment issued by the prestigious American trader Russ Winter, who claims that Beijing and Moscow would already shaping the first part of a plan against the hegemony of the dollar on world markets. In fact, China and Russia opted for a similar tactic, namely the maximum waiver of the dollar in international accounts and in the strengthening of the currencies themselves at the expense of buying gold. Moscow abroad stimulates transfers in rubles, while limiting foreign exchange. Beijing, meanwhile, is gradually moving to direct exchange yuan per euro, sterling and yen. China at the same time has increased tenfold gold imports, which currently buys, more than it produces. And, the greater the protection of the yuan for the gold, the weaker the position of the dollar as the main reserve currency. However, according to analysts, this is just the effect. The cause is in the fall in the purchasing power of the dollar, in general, and the US economy, in particular. Due to the growth of the current mass of the dollar, in the next three years could cheapen in fifty percent. Beijing and Moscow have been forced to protect their currencies against such a scenario, reason why are transferring their reserves in gold. Russ Winter notes that the plan of the allies is simple: gradually increase the convertibility of the ruble and the yuan and increase its role in international trade, for later postulate them as reserve currencies. U.S., whose government debt is now close to 110% of GDP, quite simply cannot meet this challenge. Although, of course, the "day of victory" on the dollar (the euro and pound sterling, also) is not around. For the world to accept a currency as a reserve, it must meet certain conditions, stresses Ivan Fomenko, department head of Absolute Bank: -First, the full opening of the market of currency and that currency convertibility. Second, the reliability and the opening of financial institutes aspiring countries their currencies are of reserve status. Third, the logical sequence of the actions of the monetary authorities. And in fourth place, and the main thing, the desire of companies to negotiate agreements with a base currency as the yuan. -Note that the role of Russia is rather technical, since there is any direct agreement between China and Russia on the blockade of the dollar. And Russia, in my opinion, is just one of the fellow in this great plan of China. But it suits Russia from the tactical point of view. Regarding the strategic point of view, the strengthening of a country like China can raise concerns. Russ Winter compares the next step as "kick the chair on which the United States is standing with the noose." To this end, China and Russia need to strengthen their currencies with gold, to what they do and as stated at the beginning. While most analysts agree that the "chair" was made in Washington of material surprisingly tough, and to disentangle definitely going to need at least five to ten years. [caption id="" align="alignnone" width="460"]Yuan Image: La Voz de Rusia[/caption] From Note: The views expressed by the author do not necessarily coincide with the points of view of the drafting.
Author: ForexmanWebsite: http://www.asdforex.comEmail: This email address is being protected from spambots. You need JavaScript enabled to view it.
ASDForex manager and professional trader since 2008. I am also manager where you can view the services that I give
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