China and Japan (2nd and 3rd largest economies) will now start to trade amongst themselves using Yen and Yuan and not the U.S dollar.
The is a big hit to the United States dollar, because it currently is the world’s reserve currency, however because America is in so much debt and America keeps printing more money out of thing air, the U.S dollar value is being driven down.
Think about it, if you were a business person would you sell your goods to get a currency that continues to lose value??? It just doesn’t make sense to trade (buy, sell goods) using the U.S dollar anymore. Especially, when American will reach a point very soon when they cannot even pay the interest to investors on the bonds they sold.
Very interesting, move by China and Japan, but if you were in their shoes would you do the same, given that the United States has been so reckless with debt and spending?
http://www.nytimes.com/2011/12/27/business/global/china-and-japan-in-currency-agreement.html?_r=1
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