VANCOUVER (Bullions Bull Canada) -- It is no secret that China is replacing the U.S. dollar with its own currency in more and more of its bilateral trading. It's apparent to all that the renminbi will soon have (at least) a co-equal status with the dollar as the global "reserve currency."Yet, what is rarely, if ever, discussed in the mainstream media are the enormous economic repercussions of a world suddenly awash in a massive glut of surplus dollars. In most respects economics mirrors one of the basic principles of physics: For every action there is an equal-and-opposite reaction. If farmers produce a bumper crop of wheat and supply soars, then the price falls. Similarly, if the demand for wheat suddenly collapsed, the price would also fall. Both a jump in supply and/or a plunge in demand result in the same state: abundant/excessive supply. The consequence of excessive supply is always a fall in price. This economic "physics" applies in an identical manner to the world of currencies...eventually. In a global economy ever more corrupted by serial market-rigging, nowhere is this manipulation more blatant than in the world's forex markets. Indeed, the world's nations have openly declared they are all competitively engaged in currency manipulation as denoted by the euphemistic term
A "renminbi bloc" has been formed in East Asia, as nations in the region abandon the U.S. dollar and peg their currency to the Chinese yuan...And now seven out of 10 economies in the region -- including South Korea, Indonesia, Malaysia, Singapore and Thailand - track the renminbi more closely than they do the U.S. dollar...According to the latest report by the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, renminbi-denominated trade accounted for 10 percent of China's total foreign trade in July. The figure was zero just two years ago.From July 1 to Aug. 31, global payments in the renminbi rose 15.6%, according to Swift as payment in other currencies fell 0.9% on the average...We see three obvious points:
- The move from the dollar to the renminbi is now occurring rapidly. Demand for the U.S. dollar is falling as a direct result of this shift. Even Chinese media are attempting to cover up the collapse of the dollar.
- Exponentially increasing U.S. deficits are requiring exponentially increasing money-printing as all this new dollar-denominated debt is issued. This alone must result in hyperinflation, the only question being when. The switch from the dollar to the renminbi must result sooner or later in a panic flight out of the dollar and also U.S. hyperinflation. Gratuitous money-printing from the Federal Reserve to the Wall Street crime syndicate now exceeds $1 trillion per year in 0% "loans" and simple hand-outs.