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This is the ultimate goal of the New World Order:
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Global central banks risk inflation, currency devaluation and a “big consolidation” in bond markets by pumping cash into their economies, the People’s Bank of China said in its quarterly monetary policy report.

I would bet that the Chinese have been busy using their Treasury debt as collateral against FIXED-interest-rate loans. They will have used this money to buy real assets. We know they have bought at least 454 tonnes of gold. They are importing 70 percent more copper than they consume. They are filling up a strategic petroleum reserve. They have been going around the world making deals for raw materials and acquisitions of small-enough companies that they fly under the radar. (The Chinese learned their lesson from trying to buy Unocal.)

The interest rate on these fixed-rate loans will be partially offset by the interest paid on their U.S. bonds. When the bonds go tapioca, the Chinese will have two options. They can sell some of the assets they bought but at prices much higher than what they paid and so pay off the loans with worthless dollars, or they can simply default and lose their collateral of now-worthless U.S. bonds.

Just to obfuscate what they are doing, they make some complaints about U.S. debt one day and then buy some more a few weeks later.

The Chinese aren't dummies.

It's just math - you crank out a billion people, you're going to get some smart ones in there.

Brazil and China eye plan to axe dollar
Brazil and China will work towards using their own currencies in trade transactions rather than the US dollar, according to Brazil’s central bank and aides to Luiz Inácio Lula da Silva, Brazil’s president. The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency. Mr Lula da Silva, who is visiting Beijing this week, and Hu Jintao, China’s president, first discussed the idea of replacing the dollar with the renminbi and the real as trade currencies when they met at the G20 summit in London last month.

An official at Brazil’s central bank stressed that talks were at an early stage. He also said that what was under discussion was not a currency swap of the kind China recently agreed with Argentina and which the US had agreed with several countries, including Brazil. “Currency swaps are not necessarily trade related,” the official said. “The funds can be drawn down for any use. What we are talking about now is Brazil paying for Chinese goods with reals and China paying for Brazilian goods with renminbi.”

An aide to Mr Lula da Silva on his visit to Beijing said the political will to enact a similar deal with China was clearly present. “Something that would have been unthinkable 10 years ago is a real possibility today,” he said. “Strong currencies like the real and the renminbi are perfectly capable of being used as trade currencies, as is the case between Brazil and Argentina.”

Economists have argued that while the SDR plan is unfeasible now, bilateral deals between Beijing and its trading partners could act as pieces in a jigsaw designed to promote wider international use of the renminbi.
http://www.ft.com/cms/s/0/996b1af8-43ce ... abdc0.html

So.. a few years from now, will be buying our Fiats with Renminbi? I'm no financial expert, but I *think* this is pretty significant news. It sounds to me like the rats are jumping ship, and the economies that are still growing are looking to cut us out of the loop.

Doesn't this mean that China is ready to dump the dollar, and thus will no longer buy US Treasury notes with excess dollars, which reduces the USA to basic pauperhoodness? Or is that pauperhooddom? significant? This is a BRAIN SQUEEZE and it HURTS

Two major banks outside mainland China said Tuesday they've become the first foreign companies granted approval to sell bonds in Chinese yuan - a step toward making it an international currency.

The banks - London-based HSBC Holdings ( HBC - news - people ) and Hong Kong-based Bank of East Asia ( BKEAF.PK - news - people ) - said in statements their subsidiaries in mainland China have been given permission by regulators to start issuing yuan-denominated bonds in Hong Kong.
Other details, including the amounts and timing of the offerings, weren't released.

It marks the first time firms based outside the mainland have been given the OK to sell such debt securities in Hong Kong, a move that furthers Beijing's goal of promoting the yuan as an alternative to the U.S. dollar for international trade and reserves.
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"The government is trying to become less reliant on U.S. dollars as a reserve currency, with a longer-term goal to make the renminbi a more global currency," said Kelvin Lau, regional economist at Standard Chartered ( SCBEF.PK - news - people ) Bank.

Letting HSBC and Bank of East Asia issue bonds in Hong Kong also meshes with Beijing's ambitions for its currency. Doing so helps develop overseas financial markets for the yuan, in turn boosting its liquidity and attractiveness among investors.