China and Russia, especially pushed hard by the ex KGB lacky, Putin, has just set up an agreement to use their own currency in product exchanges rather than using the American Dollar. Putin especially, has been pushing to replace the US Dollar with the Euro as the World's reserve currency. All this coming a few months after the United Nations came out with a report (World Economic and Social Survey 2010 - Retooling Global Development), saying that the dollar was an unreliable currency and needed to be replaced by something more stable.
Nice one, US Government. Especially, the Republicans. You have screwed the pooch on this one guys. Your incorrect assumptions about how economy works, your tax cuts, your turning a blind eye, deregulation, your Reagan economics, have put the US in lousy place, possibly for the rest of time. And people are still voting the GOP (Grand Old Putins, it would appear, not Grand Old Party anymore) into office. So it would appear US citizens are as dumb as the people running the country.
$4,000,000,000,000 (4 Trillion) goes through the Daily Foreign Exchange system, every day. Most of those trades now, in US dollars. Last Wednesday, Ruble-Yuan Exchanges totaled just $730,000. So what you say? Well, if you're American, having the dollar as the World's Reserve Currency, gives the US tremendous economical and political advantages. And our government, has allowed, over the past few decades, for this power to basically be trickled and shoveled away into nothingness. If we were to get into an ever worse situation than we are now in, we would not have this leverage to get back our status to where it should be.
So, how about we buckle down, and get ourselves out of this mess, that we got our selves into? We need to bite the bullet, and extract the shrapnel that was, and is, the past few bubbles and indiscretions that have become our economic policies.
In the meantime, as Fareed Zakaria said on his program on Sunday morning, let's hope that the Sino-Russian experiment remains a thought, and does not become policy.
See also: Putin's letter to the American People on Syria