China’s Renminbi Is Approved as a Main World Currency

[ThePythonicCow]

From The New York Times (http://www.nytimes.com/2015/12/01/business/international/china-renminbi-reserve-currency.html?_r=0):

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China’s Renminbi Is Approved as a Main World Currency

By KEITH BRADSHER, NOV. 30, 2015

HONG KONG — The International Monetary Fund on Monday approved the Chinese renminbi as one of the world’s main central bank reserve currencies, a major acknowledgment of the country’s rising financial and economic heft.


http://www.globalsecurity.org/military/world/china/images/renminbi-s.jpg

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There's (a little) more at the above link.

This is a key step in the fall of King Dollar.

[ThePythonicCow]

In earlier, related, news, three days ago Russia’s Central Bank added the yuan to its reserve currency basket (the Russian News Agency TASS) (http://tass.ru/en/economy/839940).

[ThePythonicCow]

Two other reports on today's IMF decision to add the Renminbi to the basket of currencies used to define its Special Drawing Rights (SDR's), effective next October 2016, joining the dollar, the euro, the pound and the yen:

The Economist (http://www.economist.com/news/business-and-finance/21679341-its-new-status-might-make-weaker-yuan-chinese-renminbi-joins-imfs)
International Business Times (http://www.ibtimes.com/chinas-renminbi-joining-imfs-elite-currency-club-2203365)

[ThePythonicCow]

From Zerohedge (http://www.zerohedge.com/news/2015-11-30/imf-confirms-yuan-inclusion-sdr-basket-now-comes-hard-part-china):

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The IMF Confirms Yuan Inclusion In SDR Basket At 10.92% Weight, Above JPY And GBP

The IMF’s Executive Board decision today means that the yuan will be included in the SDR basket from Oct. 1, 2016, effectively anointing the yuan as a major reserve currency and represents recognition that the yuan’s status is rising along with China’s place in global finance.


http://thepythoniccow.us/SDR_table.jpg

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There are quite a few more details and related history in the Zerohedge article (http://www.zerohedge.com/news/2015-11-30/imf-confirms-yuan-inclusion-sdr-basket-now-comes-hard-part-china).

[pyrangello]

So what does this all mean for the US dollar, or should we be concerned next october , or should we be concerned at all here in the US?

[Flash]

They want the Chinese to stay away from Russia, destroy the BRIC, hum..... and offer an economical front that will swipe worldwide, without Russia or the BRIC currency system being established. Or China is clearly playing on both sides.


From Zerohedge (http://www.zerohedge.com/news/2015-11-30/imf-confirms-yuan-inclusion-sdr-basket-now-comes-hard-part-china):

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The IMF Confirms Yuan Inclusion In SDR Basket At 10.92% Weight, Above JPY And GBP

The IMF’s Executive Board decision today means that the yuan will be included in the SDR basket from Oct. 1, 2016, effectively anointing the yuan as a major reserve currency and represents recognition that the yuan’s status is rising along with China’s place in global finance.


http://thepythoniccow.us/SDR_table.jpg

==========

There are quite a few more details and related history in the Zerohedge article (http://www.zerohedge.com/news/2015-11-30/imf-confirms-yuan-inclusion-sdr-basket-now-comes-hard-part-china).

[ThePythonicCow]

So what does this all mean for the US dollar, or should we be concerned next october , or should we be concerned at all here in the US?

This addition of the Renminbi to the SDR basket is one step in the end of the US Dollar as the world's dominant reserve currency.

Since World War II, the nations of the world have held the majority of their reserves as US Dollars, and most international debt contracts, involving either nations or major corporations have been denominated in US Dollars, and most major international trade arrangements have been denominated in US Dollars.

This has provided the US with a major advantage, as their Dollars were always in demand, world-wide, in great quantity. So even after the US ceased being the leading exporter of manufactured goods or resources, we (I'm in the US) could continue to pay for massive imports from other nations with US Dollars, and get the best pricing available.

We Americans have been in the exceptional position of paying for other nations real goods with US Dollars that our bankers lent into existence. Our exports were debt, violence, spying, "financial services", GMO foods, and toxic vaccines.

This is coming to an end. Americans will find the price of imported goods rising dramatically in the next year or two, perhaps doubling in "real wages" ... the number of hours of work needed to pay for a banana, flat screen TV, gallon of gas, or pair of pants.

Some major US banks will undergo extreme stress, failing or being reorganized, with many layoffs. The Federal Reserve will likely be reconstituted or ended. We've been in a major recession, with shrinking business and employment, since 2008, but it's been pretty much hidden. This will turn into a depression that is obvious to all. Social benefits, retirement plans, Medicare and Obamacare, the stock market, the housing market, bank accounts, and other forms of wealth storage will largely collapse. Many individuals, businesses, cities and perhaps even states within the US will go bankrupt. Some more debt burdened nations will outright default on their debt; in essence so will the US itself, though it's too large to simply declare bankruptcy.

We Americans will get a whole lot poorer, and many of us will struggle to provide basic food, clothing and shelter.

We Americans are going to have to learn, once again, how to make, mine or grow something that someone else might want, that we can trade for what we want to import.

[ThePythonicCow]

Between 59:33 and 1:09:08 in the following video, my favorite analyst, Jim Willie of the Hat Trick Letter (http://goldenjackass.com/), discusses the addition of the Chinese Renminbi (RMB, denominated in Yuan) to the SDR basket, and the consequences that he forecasts will unfold from that acceptance. This video was recorded two days before that SDR change was announced.

Jim speculates two things:

The Renminbi would be added to the SDR basket very soon (which it was, two days later).
This in turn might then result in some of the Gulf Emirate oil producing states, such as Saudi Arabia, United Arab Emirates (UAE), Qatar, Bahrain, Oman or Kuwait, announcing that they would start accepting the RMB in payment for their oil exports.

42BSctI5Ap4

Link to video starting at 59:33: https://youtu.be/42BSctI5Ap4?t=59m30s
At 1h02m20s into the video (https://youtu.be/42BSctI5Ap4?t=1h2m20s), Jim says:

And who knows, let's say that the IMF announces that the RMB is included in their Special Drawing Rights (SDR) basket ... wouldn't it be interesting if the next week the Gulf Emirates announce that they accept the RMB for oil payments? ... Oooo!!