Sjeltur

While the pressure on the US dollar is increasing due to the exploding money supply, there is more bad news for the US dollar this week. China is going to intensify its effort to make their own currency international. In December the Chinese announced they will switch to the yuan when trading with places like Hong Kong and Macao, now they have plans to expand it to countries that are part of the ASEAN trade-bloc and Russia.

Given the speed they expand their program to replace the US dollar, it’s likely this will continue in the near future. If the yuan becomes a true international currency, it will become a major world reserve currency automatically. Central banks will dump dollars for the yuan and it’s not difficult to guess what this will do to the value of the dollar.

In December, when China announced its plans to switch to the yuan, the governor of the Chinese central bank said: “The US dollar is unlikely to be stable next year and later. And the likelihood of the United States issuing more money in the near future adds to the depreciation risk in US dollar denominated assets and trade settlements.” Crystal clear what the largest creditor of the US thinks what will happen to the dollar in the near future.