ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Russian and Chinese Deal Prompts Question: Is This the End of the U.S. Dollar?

Updated on May 23, 2014
Source

Last week Russian and Chinese financial representatives made a historic deal which will allow them to bypass the United States dollar completely and pay each other in their respective domestic currencies. This deal, called the “Agreement on Cooperation”, is symbolic of a significant trend among the finance sectors of emerging economies to reduce their dependence on the dollar as method of reshaping the long held and current financial and geopolitical world order. Moves such as this one suggest that prudent individuals may want to turn to alternative sources of wealth storage in order to protect their holdings in case of the end of the U.S. dollar.


This Agreement on Cooperation was signed in the presence of the presidents of both countries—President Xi Jinping of China and President Vladimir Putin of Russia, and was followed the next day with the announcement of a natural gas deal between Russian and Chinese companies. Putin called the deal “a new historic landmark” and spoke of its importance.The U.S. dollar is a form of fiat currency, which means that it has no inherent value, being only paper with words printed on it. It is demand for the dollar that makes it valuable, and it is demand for the dollar that has allowed the United States government to borrow seemingly unlimited amounts of money and spend beyond its means. This has resulted in tremendous national debt for the U.S.


However, other countries, particularly those with emerging economies, including Brazil, Russia, India, China, and South Africa, have engaged in deals and practices that are diminishing their own dependence on the U.S. dollar, thereby reducing global demand for the dollar. As this trend grows, the U.S. dollar becomes more and more in danger of losing its valuable position in the global economy.


Could this mean the end of the U.S. dollar? Some say yes. Those who believe that these trends will continue and desire to protect their wealth against devaluation of the U.S. dollar might want to look into gold and silver prices. The choice to store wealth in the form of precious metals is becoming increasingly common. Precious metals can provide a sort of safe haven against currency devaluation or fluctuation—regardless of what happens to the U.S. dollar in the next few years, gold and silver will always be valuable resources. Well-known American investor, businessman, and author Robert Kiyosaki (of the Rich Dad Poor Dad series of books and other financial material) emphasizes to the public the importance of becoming financially literate in order to protect their own investments and make intelligent financial decisions. Not everyone needs to have a degree in finance or economics, but it is wise to understand the basics about fiat money and the benefits that investment in gold, silver, and other precious metals can provide for an individual’s economic wellbeing.


The Russian and Chinese Agreement on Cooperation is just one event in a string of events that indicate a trend. That trend is the devaluation and decline of the U.S. dollar. Will it result in the end of the dollar? Perhaps. But one way to avoid risk altogether is to look further into transforming cash holdings of fiat currency into real holdings of precious metals.

Comments

    0 of 8192 characters used
    Post Comment

    • profile image

      Howard Schneider 4 years ago from Parsippany, New Jersey

      Excellent Hub, Val. I think this is a bit disturbing but it does not necessarily mean it will be a continuing trend. If Europe and the rest of Asia jump on board, then it may mean the end.

    • easylearningweb profile image

      Amelia Griggs 4 years ago

      I wasn't aware of this agreement, so thanks for making us aware of this information. It's definitely something to think about and consider when investing.

    • teaches12345 profile image

      Dianna Mendez 4 years ago

      Thank you for bringing this issue to awareness. I have not heard of this deal. It is a bit concerning that our dollar is so devalued. I hope the government moves forward to solve these problems.

    • bethperry profile image

      Beth Perry 4 years ago from Tennesee

      Interesting and scary. Unfortunately, I think the best defense the U.S. could wield lies in dissolving the Fed. Reserve and to evolve some serious Isolationist practices. I know such ideas only offend Dems and establishment Republicans, but their sense of fiscal responsibility is non-existent. We have to stop trying to financially rescue and fund everyone else if we are to survive as a nation.

      Well-written article!

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: "https://hubpages.com/privacy-policy#gdpr"

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)