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Page added on July 5, 2014
China, Korea agree to direct trade in national currencies
China designated a clearing bank in Seoul for yuan transactions in South Korea on Friday, coinciding with a visit by President Xi Jinping, as Beijing promotes greater use of its currency overseas, AFP reports.
China’s central bank has authorised the Bank of Communications, the country’s fifth largest lender, to undertake yuan clearing business in the South Korean capital, the People’s Bank of China (PBoC) said in a statement.
The announcement came as Chinese President Xi Jinping wrapped up a state visit to South Korea on Friday. China is seeking to make the yuan – also known as the renminbi – used more internationally in keeping with the country’s status as the world’s second biggest economy behind the United States.
A joint communique endorsed Thursday by Xi and his South Korean counterpart Park Geun-Hye also pledged to strengthen efforts to launch direct trading between the yuan and the won.
11 Comments on "China, Korea agree to direct trade in national currencies"
Plantagenet on Sat, 5th Jul 2014 9:12 pm
When Britain went into debt, the dollar replaced Sterling. Similarly, now that the US is deeply in debt, the Yuan and the Euro are displacing the dollar.
Makati1 on Sat, 5th Jul 2014 10:56 pm
As time progresses, more and more trade will be in non-dollars. I read a new article almost everyday that tells about another country jumping on the anti-dollar train. The latest is the oil company Total. (Zerohedge)
Will it kill the USD? No, but it will take it down to it’s real value, as some economists have described to be in the <40% area. We shall see, but the avalanche seems to be picking up speed.
MKohnen on Sat, 5th Jul 2014 11:53 pm
Could someone explain to me why a digital currency couldn’t end up becoming the global reserve currency? It seems possible to me, but I’m not all that “up” on digital currencies.
Makati1 on Sun, 6th Jul 2014 2:24 am
MK, does your PC ever fail? Does the internet ever have glitches? Have you ever tried to go on-line with your bank and get the “Temporarily Off-line”, or some such, on your screen? I have, several times, and it was with Citibank, not a small town bank.
Granted, much we do today is digital, but, the ability to carry cash in paper or coin is more safe than any zeros and ones in someone’s PC. Does government ability to slam the door on your money mean anything to you? Digital gives them total control any time they want and you know they want.
Also, it depends on the internet being forever and that is definitely not going to happen. Probably not last even until 2025 as a public venue. I see it becoming more and more controlled until it is finally shut down by governments everywhere. At that time, what happens to your digital cash? I can tell you. It vanishes as the vapor that it really was.
Want the most sure money today? Gold coins …
GregT on Sun, 6th Jul 2014 2:37 am
Mkohnen,
The global reserve currency at the moment, is already a digital currency. Backed by nothing more than confidence, and debt. (most of which will never be payed back)
Arthur on Sun, 6th Jul 2014 4:14 am
The financial avelange is drawing closer and probably will precede peak-oil making itself really felt. The velocity of the dollar (correct term?) will increase and at some point the dollar will only be accepted by those who estimate they can pass the hot potato over to somebody else in time, the financial equivalent of the musical game of chairs. And when these willing parties no longer exist, inevitably these dollars will go home to America. Think of four hundred thousand Chinamen, armed with one million $ each, roaming US country side, buying up every manhole cover they can lay their hands on and dumping them on a Californian beach, to be picked up by large containerships.
Not going to happen of course, capital controls will be in place long before that, not to mention the impossibility of four hundred thousand visa applications to be processed by the poor people of the immigration office.
Davy on Sun, 6th Jul 2014 5:46 am
Art, I would rather have a dollar than a Yuan. At least the dollar you know what is going on with it not so with the Chinese smoke and mirror show. I read daily accounts of the goings on of the Chinese. Of all the major currencies the Chinese Yuan is the most manipulated in the form of credit created in the home market. The unprecedented credit creation in China dwarfs all other major economies combines. Couple that with the multiple rehypothecation, lost wealth in ghost cities, massive industry overcapacity, and mammoth housing bubble. Europe’s ECB is a joke with much of southern Europe in default and France in near default that is by traditional measure “pre-new normal”. Art, how about those negative Euro rates. That should tell you something about the European economic health. Poor Europe with no energy that is ominous. Mak, the dollar will lose some value naturally just as all currencies are but you are again devoid of a brain by suggesting 40%. If that happened Mak the global manufacturing market would move to the states. Mak, your beloved China would be bankrupt. That figure represents a collapsed BAU and end of globalism. I know your anti-American brain cannot see that far through the haze of your lust for the end of the US. Boys, the US dollar is on the way out but you are making me laugh with your allusions of these other currencies like they will have any more value relative to the US Dollar. Please guys study up on the FX market and how currencies behave in relation to each other. All currencies will collapse together maybe not in lockstep but the direction is the same.
JuanP on Sun, 6th Jul 2014 11:16 am
Mak, I agree with your point regarding cash in hand vs digital money in your bank account. Cash in a safe at home or under the mattress is a good thing to have, but a lot of food and water are the most important things of all.
JuanP on Sun, 6th Jul 2014 11:26 am
Davy, you make an excellent point when you say that the end of the US Dollar as international trade and reserve currency might be the event that leads to the collapse of BAU and globalization. It is a not unlikely chain of events based on where things stand at this point in time.
alokin on Sun, 6th Jul 2014 7:00 pm
If the dollar loses 40% of it’s buying power, what do you think will happen to the average American? If you think it is really 40% this does not mean BAU at least not for the US.
Makati1 on Sun, 6th Jul 2014 8:21 pm
Davy, your view of China is very bias and distorted by your ‘patriotism’ and the current MSM propaganda. But then, you seem to be like most who are stuck in the USSA Police State and helpless to do anything about it. About like being in Nazi Germany just prior to WW2 I imagine.
As for currencies, the dollar is now visibly losing the faith it is built on. Soon the avalanche will be rumbling in the US also as the banksters/government grabs more and more of your wealth and income and the sheeple wake up. Too late, of course.
Since I moved here in 2008, inflation has eaten 15% of the dollar’s value, and that is using the understated government figures. True, there is inflation here, because the Peso is still tagged to the dollar, but for how much longer? I’m ready for the collapse, are you?