Russia and China dropping US dollar for their trade

Vladimir Putin, Official Photograph

It is being reported today that Russia and China announced that they will no longer use the US dollar for trading amongst each other:

China, Russia quit dollar

China Daily – Nov 24, 2010

St. Petersburg, Russia – China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday.

Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies. “About trade settlement, we have decided to use our own currencies,” Putin said at a joint news conference with Wen in St. Petersburg.

The two countries were accustomed to using other currencies, especially the dollar, for bilateral trade. Since the financial crisis, however, high-ranking officials on both sides began to explore other possibilities. http://www.chinadaily.com.cn/china/2010-11/24/content_11599087.htm

This is another move in the direction to drop the US dollar as the world’s reserve currency. Russia and China do a lot of trade with each other and dropping the US dollar will affect the USA in many ways.

First, it will reduce the need for both nations to keep as many US dollars. And while they still have a lot of them, less will be tied up in their bilateral trading.

Second, getting rid of the US dollar for this will reduce the role of the US financial system in international trade.

Third, it will make it easier for other countries to follow suit as Russia and China are major players on the world scene.

Fourthly, food prices likely will continue to rise as the USA imports more food now than it did in its past.

Fifthly, although there will likely be problems for those that decide to not use the US dollar for international trade (and I expect a few to surface from time to time), once enough countries do this, a “tipping point” will be reached. This “tipping point” will happen near the time when nations decide that they are not able to buy “a dollar’s worth of goods” for a US dollar.

This will result in historically unheard inflation for the USA (at least at rates higher than the USA has ever had). The immediate affects of that would include the crashing of the USA economy and poverty and/or near poverty for the majority of the people in the USA.

Americans simply do not realize that their standard of living has been subsidized for many years by borrowing (directly through Treasury Bills, etc. and indirectly as the world’s financial system uses un-backed US dollars for international trade) from foreigners.

And while some will argue that the announcement by Russia and China to “quit the dollar” is of little consequence, it needs to be understood that for the US dollar to be completely dropped as the world’s reserve currency, it will take a lot of steps to make it happen. The situation now with Russia and China appears to be one of those steps.

The USA thought that it could get away with more “quantitative easing”, but the international community has taken several steps in the past few weeks to try to distance itself from the US dollar (for one such step, see QE2: LCG, France, China and the End of the Dollar).

The world financial order is changing which means that the USA will no longer remain on top. When foreigners stop lending money and enough want it back, this will spell doom for the USA (cf. Habakkuk 2).

Some articles of possibly related interest may include:

Can the Great Tribulation Begin in 2010, 2011, or 2012? Can the Great Tribulation begin today? What is the “beginning of sorrows”? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord?
Russia: Its Origins and Prophesied Future Where do the Russians come from? What about those in the Ukraine? What is prophesied for Russia and its allies? What will they do to the Europeans that supported the Beast in the end?
Physical Preparation Scriptures for Christians. We all know the Bible prophecies famines. Should we do something?
China, Its Biblical Past and Future, Part 1: Genesis and Chinese Characters Where did the Chinese people come from? This article provides information showing that the Chinese peoples must have known about various accounts in the Book of Genesis up until their dispersion after the Tower of Babel.
China, Its Biblical Past and Future, Part 2: The Sabbath and Some of God’s Witness in China When did Christianity first come to China? And is there early evidence that they observed the seventh day sabbath?
Asia in Prophecy What is Ahead for Asia? Who are the “Kings of the East”? What will happen to nearly all the Chinese, Russians, Indians, and others of Asia? China in prophecy, where? Who has the 200,000,000 man army related to Armageddon?
Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, British, Scottish, Welsh, Australians, Anglo-Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo nations? Why might God allow them to be punished first?
Will the Anglo-Nations be Divided? Will the lands of the United States, United Kingdom, Canada, Australia, and New Zealand be divided? What does Bible prophecy teach? Are there non-biblical prophecies that support this idea? Who will divide those lands? Who will end up with the lands and the people?