Is the US deluding itself as to the role of the dollar in the global scheme of things? Russia and China deliver a dose of reality as they discuss moving away from the dollar to use their own currencies.

Who Needs The United States? Not Russia And China

By Michael Snyder, on May 21st, 2014

Russia and China have just signed what is being called "the gas deal of the century", and the two countries are discussing moving away from the U.S. dollar and using their own currencies to trade with one another.  This has huge implications for the future of the U.S. economy, but the mainstream media in the United States is being strangely quiet about all of this.  For example, I searched CNN's website to see if I could find something about this gas deal between Russia and China and I did not find anything.  But I did find links to "top stories" entitled "Celebs who went faux red" and "Adorable kid tugs on Obama's ear".  Is it any wonder why the mainstream media is dying?  If a particular story does not fit their agenda, they will simply ignore it.  But the truth is that this new agreement between Russia and China is huge.  It could end up fundamentally changing the global financial system, and not in a way that would be beneficial for the United States.
Russia and China had been negotiating this natural gas deal for ten years, and now it is finally done.  Russia is the largest exporter of natural gas on the entire planet, and China is poised to become the world's largest economy in just a few years.  This new $400 billion agreement means that these two superpowers could potentially enjoy a mutually beneficial relationship for the next 30 years...

Russia reached a $400 billion deal to supply natural gas to China through a new pipeline over 30 years, a milestone in relations between the world’s largest energy producer and the biggest consumer.
President Vladimir Putin is turning to China to bolster Russia’s economy as relations sour with the U.S. and European Union because of the crisis in Ukraine. Today’s accord, signed after more than a decade of talks, will allow state-run gas producer OAO Gazprom (GAZP) to invest $55 billion developing giant gas fields in eastern Siberia and building the pipeline, Putin said.
It’s an “epochal event,” Putin said in Shanghai after the contract was signed. Both countries are satisfied with the price, he said.

Of course countries sell oil and natural gas to each other all the time.  But what makes this deal such a potential problem for the U.S. is the fact that Russia and China are working on cutting the U.S. dollar out of the entire equation.  Just check out the following excerpt from a recent article in a Russian news source...

Russia and China are planning to increase the volume of direct payments in mutual trade in their national currencies, according to a joint statement on a new stage of comprehensive partnership and strategic cooperation signed during high-level talks in Shanghai on Tuesday.
“The sides intend to take new steps to increase the level and expansion of spheres of Russian-Chinese practical cooperation, in particular to establish close cooperation in the financial sphere, including an increase in direct payments in the Russian and Chinese national currencies in trade, investments and loan services,” the statement said.

In my recent article entitled "De-Dollarization: Russia Is On The Verge Of Dealing A Massive Blow To The Petrodollar", I warned about what could happen if the petrodollar monopoly ends.  In the United States, our current standard of living is extremely dependent on the rest of the world continuing to use our currency to trade with one another.  If Russia starts selling natural gas to China without the U.S. dollar being involved, that would be a monumental blow to the petrodollar.  And if other nations started following the lead of Russia and China, that could result in an avalanche from which the petrodollar may never recover.
And it isn't just the national governments of Russia and China that are discussing moving away from the U.S. dollar.  For example, the second largest bank in Russia just signed a deal with the Bank of China "to pay each other in domestic currencies"...

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