Russia, China quit dollar

The China People's Daily published a major announcement yesterday late afternoon: China and Russia agreed to quit using the dollar for bilateral trade. Bilateral Trade Agreements are between on two nations at a time. They are fairly easy to negotiate, and give those two nations favored trading status between each other. I waited until today to find a source other than the State Newspaper of China, and the financial news markets are rife with articles about this important event in world trade and economy. I don't know all the implications of this, but it can't be good --

China, Russia quit dollar on bilateral trade
China and Russia have decided to renounce the US dollar and resort to using their own currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced late on Tuesday in St. Petersburg Chinese experts said the move reflected closer relations between Beijing and Moscow and is not aimed at challenging the dollar, but to protect their domestic economies "About trade settlement, we have decided to use our own currencies," Putin said at a joint news conference with Wen in St. Petersburg.

The Russian ruble already trading on the Chinese exchange, and China's yuan trade in Moscow is expected to begin in early December. Which is only a week away. The bilateral trade between the two countries is estimated to reach above $50 billion by the end of 2010, according to the Russian government. A major chunk of the trade is transacted in US dollars currently. So again...this cannot be good.

I wonder how this will affect the next biggest economies, the up-and-coming economic powerhouses, India and Brazil.
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