The Dying Dollar
November 27, 2013 by Paul Craig Roberts
Since 2006, the U.S. dollar has experienced a one-quarter to one-third drop in value to the Chinese yuan, depending on the choice of base.
Now China isÂ going to let the dollar decline further in value. China also says it is considering undermining the petrodollar by pricing oil futures on the Shanghai Futures Exchange in yuan. This, on top of the growing avoidance ofÂ the dollar to settle trade imbalances, means that the dollarâ€™s role as reserve currency is coming to an end —Â which means the termination of the U.S. as financial bully and financial imperialist. This blow to the dollar, in addition to the blows delivered by jobs offshoring and the uncovered bets in the gambling casino created by financial deregulation, means that the U.S. economy as we knew it is coming to an end.
The U.S. economy is already in shambles, with bond and stock markets propped up by massive and historically unprecedented Federal Reserve money printing pouring liquidity into financial asset prices. This month at the International Monetary Fund annual conference, former Treasury Secretary Larry Summers said that to achieve full employment in the U.S. economy would require negative real interest rates. Negative real interest rates could be achieved only by eliminating cash, moving to digital money that can only be kept in banks and penalizing people for saving.
The future is developing precisely as I have been predicting.
As the dollar enters its death throes, the lawless Federal Reserve and the Wall Street criminals will increase their shorting of gold in the paper futures market, thereby driving the remnants of the Westâ€™s gold into Asian hands.
PBOC Says No Longer in Chinaâ€™s Interest to Increase Reserves
By Bloomberg News â€“ Nov 20, 2013
The Peopleâ€™s Bank of China said the country does not benefit any more from increases in its foreign-currency holdings, adding to signs policymakers will rein in dollar purchases that limit the yuanâ€™s appreciation.
â€śItâ€™s no longer in Chinaâ€™s favor to accumulate foreign-exchange reserves,â€ť Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will â€śbasicallyâ€ť end normal intervention in the currency market and broaden the yuanâ€™s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting.