# New Zealand, China in Talks on Convertibility of Currencies



## BillS (May 30, 2011)

http://online.wsj.com/article/SB100...98470.html?mod=WSJ_hp_LEFTWhatsNewsCollection

WELLINGTON, New Zealand-Seeking to help its exporters, New Zealand is negotiating with China to make their currencies directly convertible, a spokeswoman for Prime Minister John Key said.

Reuters
Most of New Zealand's exports to China are agricultural products-particularly milk powder, meat and wool-while most of its imports from there are computers, mobile phones and clothes. Above, sheep shearering near Dunedin, New Zealand in September.

Wellington's push is aimed at driving down costs for companies that do business with China, which is close to overtaking Australia as New Zealand's No. 1 trading partner.

Talks are in the "very early stages" and "progressing," the spokeswoman said, adding that the issue had been brought up during Mr. Key's visit to China last month.

Officials at the People's Bank of China didn't return calls seeking comment.

Direct convertibility between the Chinese yuan and New Zealand dollar would end the need for New Zealand's companies and currency traders to convert New Zealand dollars or yuan into U.S. dollars when making or receiving payments.

New Zealand's two-way trade with China totaled 15.3 billion New Zealand dollars (US$12.4 billion) in the year ended April 30, compared with NZ$16.8 billion with Australia, government data showed last week. Most of New Zealand's exports to China are agricultural products-particularly milk powder, meat and wool-while most of its imports from there are computers, mobile phones and clothes.

Earlier

China, Australia Reach Currency Deal
Trade relations took a knock earlier this month when China temporarily blocked millions of dollars of New Zealand meat from entering the country, as it bolstered scrutiny of imports after a spate of mainly homegrown food-safety scandals.

Beijing is undertaking a long, gradual campaign to establish the yuan as a more market-oriented, international currency. China's State Council, or cabinet, said in a statement this month that the country would draft a plan to allow the yuan to become fully convertible. Meanwhile, the People's Bank of China is guiding the currency higher and set the median point of its permitted daily trading band last week at the strongest level ever.

China and Australia reached a deal to allow direct convertibility between the yuan and Australian dollar last month; before that, only the U.S. dollar and Japanese yen were directly exchangeable with the yuan. As China has become more industrialized, it has become Australia's biggest trading partner and buyer of its commodities, including raw materials such as copper and iron ore.

For New Zealand, "There is no time frame for concluding an agreement," Mr. Key's spokeswoman said. "We are aware it took Australia around 12 months to achieve its recent agreement with China."

China topped Australia as New Zealand's biggest trading partner from February through April this year, recent monthly government data showed. Trade between the countries has been growing ever since they reached a bilateral free-trade agreement five years ago. That increased trade helped New Zealand, like Australia, weather the economic turmoil in Europe and the fragility of the U.S. recovery, which have weighed on global growth.

As well as lowering business costs, direct convertibility may pave the way for New Zealand's central bank to diversify some of its foreign-exchange assets into Chinese government bonds. Last month, the Reserve Bank of Australia said it planned to invest up to 5% of its foreign-currency assets-close to two billion Australian dollars (US$1.9 billion)-in Chinese government bonds.

The Reserve Bank of New Zealand declined to comment.

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This is a minor development but it shows how other countries are making agreements to trade with each other in their own currencies. China in particular is making these agreements with a number of the countries they trade with. Not just the rest of the BRICS countries (Brazil, Russian, India, and South Africa) but also Japan and Australia. China buys oil from Iran using their own currency. Turkey and India have been buying oil from Iran using gold.


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## Hooch (Jul 22, 2011)

I saw that yesterday as well..another nail in the coffin it seems...


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## Elinor0987 (May 28, 2010)

It's been said before that a possible cause or contributing factor of our economic collapse is these countries bypassing the US dollar in their trade agreements and the excess treasuries they hold eventually making their way back here. How long do you think we have before this happens? There are two factors here- one being the decline in purchasing the treasuries as demand wanes and the other being the decline in rolling over treasuries that have matured. I'm guessing that once the velocity of the money starts circulating through our economy we have about six months or less before it completely crashes. I read that most of the dollars are held outside the US and am wondering when are these countries going to start dumping them.


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## helicopter5472 (Feb 25, 2013)

Add to that China is coping all our military stuff, who knows what other military secrets, can now get into our electrical grids and water systems. Obama just goes on his merry way like nothing, once in a while he puts out an idle threat, when they do it again he says "we need more information" please stop.waaa


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## invision (Aug 14, 2012)

Elinor0987 said:


> It's been said before that a possible cause or contributing factor of our economic collapse is these countries bypassing the US dollar in their trade agreements and the excess treasuries they hold eventually making their way back here. How long do you think we have before this happens? There are two factors here- one being the decline in purchasing the treasuries as demand wanes and the other being the decline in rolling over treasuries that have matured. I'm guessing that once the velocity of the money starts circulating through our economy we have about six months or less before it completely crashes. I read that most of the dollars are held outside the US and am wondering when are these countries going to start dumping them.


To answer it simply - 2015...

http://www.reuters.com/article/2013/02/22/us-britain-china-swap-idUSBRE91L0BO20130222
Here is the important key statement in the article:
_
The yuan is not freely convertible but China plans to make it basically convertible as early as 2015 and eventually put it on a par with the U.S. dollar.
​_
Oh, and thanks for the share BillS - Nice catch - I didn't see the article.

So that makes it Australia, France, Great Britain, Pakistan, Brazil, Russia, India, New Zealand... along with Turkey, Indonesia, Mexico, and the Philippines

Oh and I just found agreements also with - Argentina, Belarus, Hong Kong, Iceland, Indonesia, Malaysia, Singapore, South Korea and Uzbekistan

Am I missing any country?


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## hiwall (Jun 15, 2012)

Sounds like China wants to do this with all countries that they do business with(and I don't blame them).
Like Hooch says "another nail in the coffin"


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## invision (Aug 14, 2012)

I can hear the pounding... and honestly I think we all do...

IF it does happen, which I HOPE it doesn't happen... at least I know there are people like everyone on this board out there - ready, prepared, and willing to rebuild something better.


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## BillS (May 30, 2011)

Elinor0987 said:


> It's been said before that a possible cause or contributing factor of our economic collapse is these countries bypassing the US dollar in their trade agreements and the excess treasuries they hold eventually making their way back here. How long do you think we have before this happens? There are two factors here- one being the decline in purchasing the treasuries as demand wanes and the other being the decline in rolling over treasuries that have matured. I'm guessing that once the velocity of the money starts circulating through our economy we have about six months or less before it completely crashes. I read that most of the dollars are held outside the US and am wondering when are these countries going to start dumping them.


In the short term the Fed can just create money to "buy" treasuries or to pay off those who don't want them anymore. Of course, they can't do that forever.

I don't know how much time we have before it all starts coming apart. I still think the dollar is in pre-avalanche mode. A crash could happen at any moment but it might not happen for a year or two yet.

I read somewhere that 90% of the dollars in existence are held outside the country. A lot by central banks for use in world trade. Also a lot held by individual foreign investors. Zero Hedge claims that 1/15 of all the dollars in the world are held by private investors in Argentina alone. It would be difficult for Germany to stop buying oil from OPEC using dollars. But people in Argentina could sell their dollars and buy Swiss francs pretty easily.

I think once the dumping of the dollar starts we could see hyperinflation in a very short time. I think it's even possible for a dollar collapse to start one day and be finished the next, for all practical purposes. It doesn't matter much to the average person if a loaf of bread costs $1,000 or $1 billion.

It's possible that the collapse of the dollar could be started by a 9-11 sized terrorist attack on the US. Such an attack would be a big shock to an already weakening economy. If Iran were to launch a short range nuclear missile at New York City from a container ship that might be enough to collapse the economy.

It's occurred to me that the Obama administration could decide at some point that everything is in place for the collapse of the dollar. They could precipitate it by having the Fed announce an end to all QE. That would force the federal government to drastically raise interest rates and taxes and also stop funding food stamp cards. We could see every major city in America burn almost immediately. I still think there's a good chance they'll time that with all charges being dropped against George Zimmerman in the Trayvon Martin case.


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## Elinor0987 (May 28, 2010)

BillS said:


> It's occurred to me that the Obama administration could decide at some point that everything is in place for the collapse of the dollar. They could precipitate it by having the Fed announce an end to all QE. That would force the federal government to drastically raise interest rates and taxes and also stop funding food stamp cards. We could see every major city in America burn almost immediately. I still think there's a good chance they'll time that with all charges being dropped against George Zimmerman in the Trayvon Martin case.


They could already have plans for a false flag event in place and are waiting for the triggering event from the economy to enact it. A terrorist attack, emp strike, pandemic, etc., would easily cover up a collapse and have the people thinking that the economy is down because of that event and not because of their policies. These two videos from Greg Hunter do a great job of illustrating how fragile the circumstances are. No matter what the fed does, the inevitable outcome is a collapse.


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## invision (Aug 14, 2012)

You know, your are right about having a trigger effect.

However...

Right now, those in the market (and I am talking not - you and me, I am talking leadership at places like Hathaway, Investco, Goldman, etc...) are highly educated individuals - those that run the Fed Reserve and Treasury aren't dumb either...

I guess my point is, I think the general public is just to dumb or uninterested to care... so why even *have or need *a trigger. As I posted in another post, news comes out that the economy is good - stocks go down... news comes out that the economy is bad - stocks go up... the whole reason for this is QE... if the economy looks good, those who are the big investors are affraid the flow of dollars from the Fed will dry out like a desert... they start taking their profits by selling... bad news comes out, flow should continue - rebuy their stocks - make more money - yet deep down they know that this is a buble - they are just playing the game trying to make as much as possible. Those in the middle - and I mean we are talking about the 90% of the 1%'ers - they are doing the smart thing - doing the buy/sell cycle - turning money into new money, then taking that new money and investing it else where - PMs, homes in Costa Rico, preps, etc... It is the 'common' people that are going to get hurt, because 1 - they are asleep at the wheel 2 - they buy in when the market is up, then get punished when it goes down, and if they are my age - we have seen several bubbles in the equities over my 40 years, so no one is learning this leason...

Sorry - very agrivated about our economy, and the lack of "care" that we have nothing but falsy inflated bubbles.


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## Elinor0987 (May 28, 2010)

invision said:


> Sorry - very agrivated about our economy, and the lack of "care" that we have nothing but falsy inflated bubbles.


Most of us here feel the same way. Its been said before that most people aren't going to wake up until after the economy crashes but by then it will be too late. As much as I hate to think about it, that's probably the only thing that would wake up the masses. Sometimes I get a surreal feeling when I look at the people around me. It would be like being in Rome right before it fell or on the Titanic before it went down and knowing that everything is about to fall apart but nobody cares because as long as they have their distractions everything is ok to them. They can't fathom what life would be like without the conveniences and luxuries they've grown accustomed to and most of them aren't going to be able to cope once it finally does crash.


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## JayJay (Nov 23, 2010)

I went to DG to get a lot of lunch items for Gene's lunch. (beanie weenies and Vienna have got to be getting old!)
When I got home, I wanted to try these cheap little packages of cookies I'd never seen before...6 tiny cookies in each package of 10 for $1.:congrat:

THEY WERE MANUFACTURED IN INDIA!!!:scratch:scratch

Can't we make anything anymore??

Oh, the freezer plastics for my strawberries??..(And I love them, the way they seal and fit).
From INDIA..can we not make plastics any more??

And this on top of being told by a HVAC repair guy, EPA is trying really hard to outlaw Freon?? in A/C central units and we will need a new '410' in a couple years if they get their way--$5000 to newly retrofit what we have, a heat pump.
Well, I will get a new unit and trash the heat pump, before I do that.


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