Another big step for the Renminbi
Whilst all eyes are on the US over the next 2 days about whether it slightly reduces record money printing, each day it continues seems to strengthen the resolve of other major players (China in particular) to seek an alternative to the very dollar it undermines. This week the 2 biggest financial centres in Asia, the Hong Kong Exchange and Singapore Exchange signed a memorandum of understanding to work collaboratively to deliver more financial products denominated in Chinese renminbi (Yuan). The renminbi has grown in global use by nearly 5 times to now be the world’s second most used currency for global trade. With China clear in its desire to move away from US reserves and tensions building on the petro dollar status there are serious cracks forming for the world’s reserve (Fiat) currency. All the while the fastest growing currency belongs to the country also buying the most gold that could in theory back its currency one day…. You can’t hold the world’s reserve currency and treat that privilege like the US do and not expect consequences.