Australia and China Say "Goodbye" to US Dollar

We have been warning about this movement for some time now...movement AWAY from using the US dollar as a "reserve currency".

Remember, the US dollar has a built in demand in that every nation uses it to transact business.  But as countries figure out that our dollar is NOT "as good as gold"....they will come up with ways to NOT USE IT anymore.

This will most certainly have the effect of chipping away at the value of our currency.

Also remember that we have had the dubious advantage of owning the printing press on the world's ONLY reserve currency for over 70 years now.

What will happen when the day comes that we can't simply PRINT our way out of problems...

Can you spell the word U-N-R-E-S-T?

A month ago we pointed out that as a result of Australia's unprecedented reliance on China as a target export market, accounting for nearly 30% of all Australian exports (with the flipside being just as true, as Australia now is the fifth-biggest source of Chinese imports), the two countries may as well be joined at the hip.

Over the weekend, Australia appears to have come to the same conclusion, with the Australian reporting that the land down under is set to say goodbye to the world's "reserve currency" in its trade dealings with the world's biggest marginal economic power, China, and will enable the direct convertibility of the Australian dollar into Chinese yuan, without US Dollar intermediation, in the process "slashing costs for thousands of business" and also confirming speculation that China is fully intent on, little by little, chipping away at the dollar's reserve currency status until one day it no longer is.

Needless to say, China is eagerly looking forward to taking yet another bite out of the USD's reserve status.

Most importantly, to China, Australia will serve as the Guniea Pig - should this experiment in FX liberalization work out to China's satisfaction, expect Beijing to engage many more trade partners in direct currency conversion.

Why is this so very critical? For the simple reason that the free lunch the US has enjoyed ever since the advent of the US dollar as world reserve currency, may be coming to an end as other, more aggressive alternatives - both fiat, and hard-asset based - to the USD appear. And since there is no such thing as a free lunch, all the deferred pain the US Treasury Department has been able to offset thanks to its global currency monopoly status will come crashing down the second the world starts getting doubts about the true nature of just who the real reserve currency will be in the future.

Here;  http://www.zerohedge.com/news/2013-03-31/thanks-world-reserve-currency-no-thanks-australia-and-china-enable-direct-currency-c

Crashing down?!?!  Doubts about US dollar?!?  What??  That can't possibly happen!!  This is America!!!!!

The Lord sets up and tears down kings and kingdoms.

Newsflash;  IT'S NOT ABOUT US!!!