Should be a good start to the week for metals, and not so good for the US dollar.
China is continuing it’s efforts in setting up options around the world for exchange with foriegn countries based on the Chinese yuan instead of the US$. The most recent was a currency swap with New Zealand that is reported to last three years with an option to extend if desired worth roughly 25 billlion yaun.
China has come in to agreement with many countries around the globe to trade with the yuan instead of the US$ since it acquired a large portion of American debt. The Chinese have made it known that they are unhappy with the way the US has been printing money and giving it out so cheap it’s practically free.
China is setting themselves up around the world so that they are not dependent on the US$ for trade. In spite of the US consumer buying a huge chunk of Chinese products, and China needing the US as much as the US currently needs China, it seems China has found a back door and is in the middle of re-landscaping the back yard. The US is not invited for feedback on how this should be setup.
The scary part of all this is how the Chinese have not let there yuan increase in value. What will they do when they have enough deals around the world to make them feel comfortable even if the US$ collapses. Once this level of agreements have been reached, will the Chinese allow thier currency to run wild and crush the US$
You can see the official statement for this agreement on the PBOC website here;