Australia And China To Enable Direct Currency Convertibility

[Cincinnatus]

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

The opening act of the dollar being rejected as the world's international currency and a sign of how other nations view our deficit, monetary expansion, and resultant inflation.

...expect many more Asian countries (at first) to follow in Australia's footsteps, because while the developed world is far more engaged in diluting its currency as a means to spur "growth", Asian and developing world nations are still engage in real, actual trade, where China is rapidly and aggressively becoming the world's hub.

[jmyrlefuller]

The Australians had best figure out the danger of dancing with the dragon. Eventually, you will get burned.

[Cincinnatus]

The Australians had best figure out the danger of dancing with the dragon.

My guess is they are starting to see that soaring with the eagle may leave them broke.