Australia and China Strike Another Nail into the US Dollar for Independence Day

July 5, 2012 By 19 Comments

In a move that has slipped under the radar of even the alternative financial media, China celebrated Independence Day by handing the US Dollar’s reserve currency status another severe flesh wound.
China moved Wednesday to make Australia the first G20 nation with the ability to directly convert its currency into Chinese yuan, bypassing the US dollar.

The writing is on the wall for the dollar’s reserve currency status.

Australia is hoping to become the third country in the world to be able to directly convert its currency into Chinese yuan.

The Treasurer Wayne Swan will push the case at a currency forum in Hong Kong and during meetings with Chinese leaders in Beijing next week.

Analysts say Australia’s push to directly convert its currency into yuan will make trade with China more efficient and will lower transaction costs, particularly for the country’s big miners and importers.

ANZ currency strategist Andrew Salter says currently they have to go through the US dollar or Japanese yen first.

“You don’t have to do that interim step – you can convert directly from renminbi into Australian dollars and therefore avoid one layer of transaction costs associated with the deal – so primarily a means to remove that extra layer of cost, so its an efficiency advantage,” he said.

However, Mr Salter says the deal is unlikely to move currency markets, as China’s capital account remains shut.
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Comments

  1. Avatar of AGXIIK AGXIIK says:
    July 5, 2012 at 5:52 PM

    Is it just me that doesn’t want to hold dollars?  This seems to be a huge game of musical chairs and when the tunes stop the last person holdings dollars loses.  This is sort of funnny except it’s not cuz’ Average Joe and Jane will be hosed.

  2. Avatar of PhilAZ PhilAZ says:
    July 5, 2012 at 5:59 PM

    New theme song for the US Dollar:

    Tan me hide when I’m dead, Fred,
    Tan me hide when I’m dead.

    So we tanned the dollar’s hide when it died, Clyde,
    And that’s it hanging on the shed

    The sad fact is, however, that death by China is not a pretty thought either….

    Just my 2 cents
    Phil AZ

  3. Avatar of silverdog silverdog says:
    July 5, 2012 at 6:29 PM

    These are the dog days for the dollar.

  4. Avatar of Silverbullet1976 Silverbullet1976 says:
    July 5, 2012 at 6:30 PM

    Heres the theme song for the silver liberation army it kinda picks me up when Im feeling down.

    Hey bankers the soldiers are coming!!


  5. Avatar of PatFields PatFields says:
    July 5, 2012 at 6:44 PM

    (Recited in ‘Bobbie the Robot’ voicing …)

    It … doesn’t … really … matter …

    It … doesn’t … really … matter …

    It … doesn’t … really … matter …

    Whether Yuan is first or last to implode, They’re ALL doomed.

  6. Avatar of asdfghjkl32 asdfghjkl32 says:
    July 5, 2012 at 6:45 PM

    Congratulations to Australia.

  7. Avatar of Neo Neo says:
    July 5, 2012 at 7:16 PM

    There is a war coming.

  8. Avatar of Tears of the Moon Tears of the Moon says:
    July 5, 2012 at 7:34 PM

    Hi Doc,

    thanks for posting this story, Australia doesn’t get much of a mention on the world stage but this story is as important as Japan trading directly in Yuan. Australia sells China the majority of its raw materials – coal, gas, metals and agriculture, all paid for at the moment in US dollars. China buys so much from Australia that Australia runs a trade surplus with China!
    My home town, Newcastle NSW, where the spot price for coal world wide is set, and exported to China, Korea and Japan. 
  9. Avatar of 4 oz 4 oz says:
    July 5, 2012 at 8:19 PM

    I have always loved that song Phil–Even have it stashed in my youtube favs:

     


     
    It actually recieved some air play int USA in the summer of ’72, mostly in southern California.

     

     

  10. Avatar of AGXIIK AGXIIK says:
    July 5, 2012 at 8:41 PM

    Now we’re talking  Silver Doctors getting their sense of humor back.

  11. Avatar of Argyrion Argyrion says:
    July 5, 2012 at 8:43 PM

  12. Avatar of zinc zinc says:
    July 5, 2012 at 8:44 PM

    @ tears of the moon : do y’all need any Texans down there … after seeing your vaction picturs on your web site makes me want to move down there !

     

  13. Avatar of Tears of the Moon Tears of the Moon says:
    July 5, 2012 at 9:18 PM

    Hi Zinc,

    we could always squeeze in a few Texans, actually if you love your Silver you can move to Texas, Queensland, the sight of a primary silver mine and still call yourself a Texan :-)
  14. Avatar of ich1baN ich1baN says:
    July 5, 2012 at 10:40 PM

    THanks for the photos from the other side of the world mate…. Nice to see some Roos on here. I had an Australian friend tell me once about a story of this tough rugby guy that always bragged about not ever breaking his nose and then one day on a run he heard something tracking him closely and he turns around to see a Big Red and not a moment later, it punched him in the face and knocked him out, breaking his nose.

  15. Avatar of SilverOne SilverOne says:
    July 5, 2012 at 10:55 PM

    Reading this article as I fumble through my dollar bills singing Another One Bites the Dust!

  16. Avatar of Tears of the Moon Tears of the Moon says:
    July 5, 2012 at 11:09 PM

    Some more roos

  17. Avatar of Sergio of The Jungle Sergio of The Jungle says:
    July 6, 2012 at 1:17 AM

    The move by Australia puts it on the “Next to be whacked” list. Keep an eye on your horizon for smoke stacks boys.

  18. Avatar of Tears of the Moon Tears of the Moon says:
    July 6, 2012 at 1:54 AM

    Australia will be fine, Barry has been hitting on our  Prime Minister

  19. Avatar of silver psycho silver psycho says:
    July 6, 2012 at 2:26 AM

    With 2500 US  (American!) Troops Stationed in Darwin (North Australia) up to 2017 with their guns facing north, Doesnt take much for them to turn their Pistola’s south when the Aussies stop playing the US Dollar exchange game.  Might see US tanks driving around the main streets of Sydney. Maybe Johnny Howard get his balls tickled by a US TSA.

    P.s.s. No one voted in that prime minister lady.. Thats the truth, she just kicked out the last guy, cause he wasn’t following the CIA directive, and took over.

    The United States of Australia, once a penal colony, always a penal colony.

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