Vladimir Putin is in China and apparently he had a very busy first day. ZeroHedge.com is reporting that VTB, Russia’s second largest bank, has signed a deal with Bank of China which includes paying each other in domestic currencies, bypassing the need for the US dollar.
Russia and China’s desire to move away from the US dollar, with the ultimate goal of removing it as the world’s reserve currency, has been well documented. And Putin, as expected, is using his current trip to China to finalize a number of deals that both countries hope will lead to de-dollarization.
An official from VTB released the following statement, “Under the agreement, the banks plan to develop their partnership in a number of areas, including cooperation on ruble and renminbi settlements, investment banking, inter-banking lending, trade finance, and capital markets transactions.”
This is seemingly just the first step in Russia’s plans to become China’s largest trading partner, and by agreeing to do business in domestic currencies, Putin is developing an extremely strong ally in his war against the US dollar.
Putin said after signing the deal, “Our countries have done a huge job to reach a new historic landmark…China has firmly settled in a position of our key trade partner.”
Any drop in the status of the US dollar, perceived or actual, could mean a boost for physical gold, as most people use the yellow metal as a hedge against inflation. And there is now no doubt that the US dollar is under attack.