Friday, September 14, 2012

China's Yuan/Remminbi becoming Internationally Traded Currency. CME group adding the currency to Futures Exchange and settling futures in the Yuan. They see the writing on the Wall.

Well this is one of the biggest events and stories in my opinion that is launching the Chinese Yuan/Renminbi as the world's reserve currency in the not too distant future.

With Bernanke completely debasing the dollar by launching a never ending QE3 for purchase of mortgages, which is really a back door continued bail out of banks. 

The move by the Federal Reserve proves the banks are not capable of lasting on their own.  They have to have support.  That support will come from a non stop printing of new U.S. dollars.

This is going to cause inflation, that inflation will not go completely hyper (in my opinion) until the dollar is not the oil trading currency of the world.  Once the dollar is dropped as the oil currency that is when we will see unbelievable (and shocking to those not paying attention) hyperinflation.

China has been positioning itself for being the reserve currency for a few years now.  From China making deals with South American countries to trade in Yuan, to Russia and China trading in their currencies without the dollar.  Even Japan got into the fray by beginning to trade with China in Yuan and leaving the dollar behind a few months ago.   The BRIC nations have set up trading in Yuan too.  Remember the BRIC nations want to do their own Central trading bank, leaving out the World Bank from their trade money exchanges between them.

What cements the fact that China is going to have the world's reserve currency in the not too distant future?

The Yuan/Renminbi is about to be traded on the futures market in the United States starting next month and in the first quarter of 2013 in Europe on their futures exchange.

The CME group which runs the future's exchange in Chicago has added the Yuan to their exchange to be traded starting this year. 

People need to fully understand the full impact of this.  This means the writing is absolutely on the wall that the dollar is on it's way out as the reserve currency.  Even the U.S. based CME group sees the writing on the wall and has taken steps to position themselves for being part of the change and is making the way easier for the Yuan.

Portions from article linked:

Chicago-based CME Group Inc announced on Thursday that it is expanding its overall suite of yuan products by including deliverable offshore renminbi futures, answering increased demand for the currency in overseas markets.

The deliverable CNH futures will be launched and listed in Chicago in the fourth quarter of this year and in Europe in the second quarter of 2013, said the largest exchange operator in the United States.

CME's products come into play as the Hong Kong Exchanges & Clearing Ltd is scheduled next week to launch the first exchange-traded USD/CNH currency futures settled in yuan.

The announcement came as CME sees the market being "ready" for offshore renminbi futures, with regard to increasing liquidity outside China, said Julien Noble, head of CME Asia-Pacific.

He said one of the "significant developments we have witnessed is renminbi accumulation" outside the Chinese mainland, as well as broader usage in cross-border trade settlement.

"We have witnessed obviously a significant appreciation of the currency over the last several years, as well as measures taken by the central bank in expanding the band within which the renminbi is trading.

"Investors in Hong Kong as well as London with demands for risk management will be able to benefit from these contracts given on our global platform around the clock," he said.

"The major reason is in the back office process where clearing members need to be finalized in order to facilitate the settlement and clearing of these products," Noble explained, adding that the renminbi has evolved between 2006 and today in internationalization.

"The CNH contract gives CME Group the ability to handle the renminbi as a deliverable currency, and eventually the ability to use renminbi as a currency of denomination for other contracts in other asset classes, for example, commodities."

But Noble said the potential for the trading volume of these contracts would be "modest" given the fact that the internationalization is just starting.

However, Wu Xiaoling, former deputy chief of the central bank - the People's Bank of China - said the internationalization of renminbi doesn't have any "timetable" yet.
The article says a lot.  It says that the Yuan is on it's way to settling contracts in the currency for future's trading and it is on it's way to being international.

CME added a page for the Yuan/Renminbi on it's website now.

Here is the screen capture of the page:

This shows there is no confidence in the dollar anymore and it is quite interesting that the CME group announced the adding of the Yuan on the same day Bernanke announced the never ending QE3.

It has been awhile since I have said this, but I am going to say it now:

I sincerely hope people wake up and see the writing on the wall and fully realize the only way to protect themselves is in Gold and Silver!

Just look at what Gold and Silver have done this week.

If you only have a few dollars, buy Silver!

Bernanke put the final stake in the heart of the dollar yesterday.

Now... how long do we wait until we hear oil will be settled in Yuan or alternative (gold) currencies from Saudi Arabia?  It is only because of them the dollar is still the oil currency.   When will they finally change their position?  With Bernanke's announcement yesterday, I can't imagine it will take many years for them to drop the dollar.

Lets not forget that South Africa's gold mining is at a stand still at this time, which is really cutting into gold getting on the market.

 Have you paid attention?  Do you have Gold and Silver to protect yourself?

If you think Gold and Silver has risen a lot already...... You haven't seen nothing yet!


  1. Couldn't the value of the Huan be manipulated through short sales and naked puts once it's on the exchange?