China’s central bank recently made a hugely important announcement.
Very few mainstream media outlets are even mentioning this story, but
China just put a somewhat significant nail in the coffin of the U.S.
dollar’s status as reserve currency.
Currently, most contracts are settled in dollars. So if Great Britain
wants to buy oil from Saudi Arabia, they must first buy dollars.
But China’s central bank just began to allow certain cross-border trades
to be settled in the Chinese yuan.
In the solitary Reuters story on the subject one sentence sticks out as
especially foreboding for the dollar:
“In a statement on its website www.pbc.gov.cn, the Chinese central bank
said it would respond to overseas demand for the yuan to be used as a
The one problem with China making this gambit is that the Chinese
government doesn’t own very much gold