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Gold/Mining/Energy : Big Dog's Boom Boom Room

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From: teevee	3/20/2012 10:01:39 PM
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Oil is traded in US dollars and the price of oil is in part linked to the value of the US dollar. The recent creation of offshore RMB bonds is China's version of a reserve currency so they can not only increase trade, and do so in RMB currency, but also buy oil with RMB. Trading in RMB will also allow China to go after US customers for high value products ranging from high tech products to heavy industry products like bull dozers etc. Although a recent development, as the RMB grows as a new reserve currency, it will only serve to weaken the US dollar and make imported oil more expensive. Oil producers sit on huge piles of US treasuries because they don't have a home for all the US dollars they have. There is a tendency to use US reserves to purchase US goods and services, including military hardware. When major oil producing countries start accepting RMB as a reserve currency, there will be a tendency to use those reserves to buy Chinese goods and services........Until now, no other economy was large enough, or projected to become large enough to challenge the US economy and US currency as THE international trade currency for foreign reserves.

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