Russia’s Dollar Exit Takes Major New Step

For some time both China and the Russian Federation have understood, as do other nations, that the role of the US dollar as the world’s major reserve currency is their economic Achilles Heel. So long as Washington and Wall Street control the dollar, and so long as the bulk of world trade requires dollars for settlement, central banks like those of Russia and China are forced to stockpile dollars in the form of “safe” US Treasury debt, as currency reserves to protect their economies from the kind of currency war Russia experienced in late 2014 when the aptly-named US Treasury Office of Terrorism and Financial Intelligence and Wall Street dumped rubles amid a US-Saudi deal to collapse world oil prices. Now Russia and China are quietly heading for the dollar exit door.

Russia’s state budget strongly depends on oil export dollar profits. Ironically, because of the role of the dollar, the central banks of China, Russia, Brazil and other countries diametrically opposed to US foreign policy, are forced to buy US Treasury debt in dollars, de facto financing the wars of Washington that aim to damage them.

That’s quietly changing. In 2014 Russia and China signed two mammoth 30-year contracts for Russian gas to China. The contracts specified that the exchange would be done in Renminbi and Russian rubles, not in dollars. That was the beginning of an accelerating process of de-dollarization that is underway today. …

http://journal-neo.org/2015/12/05/russias-dollar-exit-takes-major-new-step/

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