The Millennium Report
July 5, 2014
Submitted by Tyler Durden
Not even we anticipated this particular “unintended
consequence” as a result of the US multi-billion dollar fine on BNP (which
France took very much to heart). Moments ago, in a lengthy interview given to
French magazine Investir, none other than the governor of the French National
Bank Christian Noyer and member of the ECB’s governing board, said this stunner
at the very end, via Bloomberg:
NOYER: BNP CASE WILL ENCOURAGE ‘DIVERSIFICATION’ FROM
DOLLAR
Here is the full google translated segment:
Noyer: Beyond [the BNP] case, increased legal risks
from the application of U.S. rules to all dollar transactions around the world
will encourage a diversification from the dollar. BNP Paribas was the occasion
for many observers to remember that there has been a number of sanctions and
that there would certainly be others in the future. A movement to diversify the
currencies used in international trade is inevitable. Trade between Europe and
China does not need to use the dollar and may be read and fully paid in euros
or renminbi. Walking towards a multipolar world is the natural monetary policy,
since there are several major economic and monetary powerful ensembles. China
has decided to develop the renminbi as a settlement currency. The Bank of
France was behind the popular ECB-PBOC swap and we have just concluded a
memorandum on the creation of a system of offshore renminbi clearing in Paris.
We have very strong cooperation with the PBOC in this field. But these changes
take time. We must not forget that it took decades after the United States
became the world’s largest economy for the dollar to replace the British pound
as the first international currency. But the phenomenon of U.S. rules expanding
to all USD-denominated transactions around the world can have an accelerating
effect.
In other words, the head of the French central bank,
and ECB member, Christian Noyer, just issued a direct threat to the world’s
reserve currency (for now), the US Dollar.
Putting this whole episode in context: in an attempt
to punish France for proceeding with the delivery of the Mistral amphibious
warship to Russia, the US “punishes” BNP with a failed attempt at blackmail
(recall that as Putin revealed, the BNP penalty was a used as a carrot to
disincenticize France from concluding the Mistral transaction: had Hollande
scrapped the deal, BNP would likely be slammed with a far lower fine, if any).
Said blackmail attempt backfires horribly when as a result, the head of the
French central bank makes it clear that not only is the US Dollar’s reserve
currency status not sacrosanct, but “the world” will now actively seek to avoid
USD-transactions in order to escape the tentacle of global “pax Americana.”
And, the biggest irony of all is that in “punishing”
France for dealing with Russia, that core country of the Eurasian alliance of
Russia and China, the US merely accelerated the gravitation of France (and all
of Europe) precisely toward Eurasia, toward a multi-polar (sorry fanatic
believers in a one world SDR-based currency) and away from the greenback.
Or shown visually (as we have ever since 2012).
Reserve Currency Status
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