Deutsche Bank Given a Direct Line to Beijing

Trade between Europe and China became a lot simpler this week as China authorized Deutsche Bank as the first non-Chinese bank to clear yuan payments in Europe. The agreement will make it much easier for European business to convert euros directly to yuan (also known as renminbi) without using the dollar as an intermediary.

• This could be done before, but only Chinese banks had access to the Chinese reserve bank and were able to process large currency transactions directly with that bank. Deutsche Bank is already a core part of Europe’s banking and trade infrastructure, helping many more companies change currency direction.

Deutsche Bank’s China president Leo Yin called the connection a “direct bridge” to the Chinese financial system.

The Berliner Zeitung explained China’s overall strategy: “For years, Beijing has been trying to expand the international importance of its currency and reduce the enormous dominance of the U.S. dollar.” It has made progress but remains a long way behind the dollar.

It continued, “Beijing is therefore strategically expanding the infrastructure designed to make international business transactions in yuan simpler and more attractive.”

So much of America’s wealth comes from its control of world trade. One important part of that is physical control: Its navy keeps sea trade safe and removes obstructions to that trade.

• That dominance is now being challenged by Iran. If even a second-rate power can shut down trade in its neighborhood, how dominant is America, really?

The other factor behind America’s wealth is its financial dominance. Loaning money to the U.S. government is the default safe investment, and dollars are the default international currency.

• Now China and Germany are challenging that assumption. If the world no longer needs dollars to trade, then investing in the U.S. government is no longer safe.

The economic curses prophesied in your Bible have already set in, as last night’s Trumpet Brief shows. The fall of the dollar will be one of the most dramatic of those curses. You can read more of what that looks like in our article “When Will the Dollar Collapse?”