The Little Book of the Shrinking Dollar: What You Can Do to Protect Your Money Now

China Ends Dollar’s Reign

I tell people at every stop I make that I believe the dollar will lose its reserve currency status in the next 10 years and maybe even sooner. I can point to one country that has its eyes focused on removing the dollar from its lofty perch, and that’s China. China’s President, Hu, has said that, “the dollar currency system is a product of the past.”

—Chuck Butler

China, you see, is taking baby steps. Chuck wagers they’re preparing their currency—the yuan—“to ascend to the lofty perch held by the U.S. dollar.”

How’s that going to happen? They’ll start with their trading partners. They’ll simply remove dollars from their trade transactions.

It’s already happening. They’ve just signed a currency swap agreement with neighbor Japan. All trade that was dollar-denominated will now be done by exchange of yuan for yen directly.

Thus, each country won’t need nearly the stash of dollar reserves they once had. And this isn’t the first country to sign a swap agreement cutting out the USD.

China will also exchange directly with Russia, Argentina, Brazil, Belarus, and almost all its Asian neighbors.

Keep in mind, too, there’s the fact that China is Africa’s largest trading partner. At last count, 13 percent of Sino-African trade is conducted in yuan. But when you’re willing to build and finance infrastructure in nations that want to catch up, keep the lights on, and grow economically, deals will be done according to your demands more often than not. That’s how China ...