China Making Another Strategic Move

The dollar’s status continues to erode. "China began to allow the yuan’s use for cross-border trade on a trial basis in 2009, and the program is expected to be rolled out nationwide this year." As the dollar weakens, realize that it doesn’t necessarily mean price inflation spread equally across the board. Everything we import can go up, while wages can remain stagnant, which is what is happening now, and is a recipe for a lot of pain. The decade long approach to growing the economy through expanding the government’s roll has metastasized into total dependency on that same expansion continuing indefinitely, but with about 45% of GDP being direct govt. spending at all levels, it has reached its practical limits.
HSBC: China to settle most trade in yuan by 2015 – MarketWatch: www.marketwatch.com/story/hsbc-china-to-settle-mos…05-30

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