According to the Guardian (and Al Jazeera, the Canadian Broadcasting Corporation, the Globe and Mail, the Australian Broadcasting Corporation and the New Zealand Herald), the US dollar took another major hit this week after Zimbabwe has made the Chinese yuan legal tender. According to minister of finance Patrick Chinamasa, the move comes after President Xi Jinping cancelled $40 million of Zimbabwean debt that comes due in 2015.
Zimbabwe abandoned its own dollar in 2009 after hyperinflation, which peaked at around 500 billion percent, made it unusable.
Following the demise of the Zimbabwean dollar, the country did business in various foreign currencies, including the US dollar, the South African rand and eventually the yuan. However up until now, most business was conducted in US dollars, and the yuan wasn’t approved for public transactions.
China is Zimbabwe’s biggest trading partner following Zimbabwe’s isolation by its former western trading partners over the country’s poor human rights record.
This story has been widely reported outside the US, but seems to have been blacked out in the US media. Reporting bad news at this time of year is too likely to disrupt the mindless consumption and debt accumulation expected of Americans over the holiday season.
In the corridors of power, there are deep concerns about the continued stability of the US dollar in the face of America’s decrepit manufacturing base and soaring deficits. Over the past decade, the Obama administration has been particularly concerned about growing Chinese investment in Africa. According to the Financial Times, China is the largest investor in African infrastructure, representing an estimated $13.4 billion in 2013.
Analysts across the political spectrum increasingly view Obama’s misguided foreign policy (his threats against Russian and China, his deranged Middle East military policy and his desperate attempt to ram the Transpacific Partnership* through Congress) as a desperate attempt to shore up the dollar against massive Chinese economic gains.
True to form, the Obama administration has addressed these concerns with military force, involving US troops in a series of African wars that they’re trying to conceal from the American public. See The War in Africa the US Military Won’t Admit It’s Fighting
*The Transpacific Partnership (TPP) is a so-called “trade agreement” seeking to isolate China from its Asian-Pacific trading partners – by deliberately excluding China from the treaty.
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