The U.S Dollar is quickly losing its status as the world reserve currency. Five of the top ten economies in the world, plus a few others, no longer use the dollar as an intermediary currency for trade. This trend poses a huge risk to the dollar and the United States along with it.
ZeroHedge points out today that Australia, the world’s 12th-ranked economy, has now joined a growing list of nations that have agreed to bypass the dollar in bilateral trade with China. China, ranked 2nd behind the U.S., also has similar agreements with Japan (3rd), Brazil (6th), India (9th), and Russia (10th).
Although unilateral agreements have been in place for some time between China and the countries listed above, last week the BRICS (Brazil, Russia, India, China and South Africa) agreed to set up a development bank to compete with the IMF, indicating it’s gearing up to compete in a post-dollar world.
Additionally, Brazil, who agreed in principle to drop the dollar with bilateral trade with China some time ago, just made it official with $30 billion in annual currency swaps which will facilitate around 50% of all trade between them.