This is very big news. Ever since crazy Dick unlinked the dollar from gold in 1971, oil has served as an unofficial price support for the dollar ever since. This is because all oil that is traded in the world is traded in dollars. There were a few countries that did not trade oil in dollars like Iraq and potentially Libya but luckily they were ruled by very bad men and had to be taken out by the peace loving civilized societies of the West. This of course issued an new golden age that allowed the poor oppressed people of Iraq and Libya to enjoy the fruits of democracy that is working so well here, but I digress.
China is now the newest country in the world to attempt get out from under the Federal Reserve’s massive monetary devauluation. They want to trade oil in something else besides dollars. This is very logical for them, they are getting killed economically by continuing to buy so many dollars because dollars are dropping in value so quickly and will continue to drop in value as far as the eye can see. It is likely obvious to the leaders of China and many other national leaders from around the world for that matter, that the dollar is on its last legs. No one wants to get stuck holding the bag of trillions of dollars when the run against the dollar finally takes place. For this reason, China is already taking measures to insulate themselves when this inevitably happens. The problem for the U.S. is that the more steps that China takes to protect themselves, the more weak the dollar eventually becomes. Unfortunately for the U.S., China will be much harder to persuade than Iraq or Libya.
When the actual run on the dollar actually happens is still unknown but things continue to move in that direction. There is no end to the debt or the money printing that comes out of the Federal Reserve. The U.S. will default either out right by reneging on its obligations like social security, medicare, and bonds or through massive inflation which the usual tool of governments. Either one will be devastating to the U.S. economy but massive monetary inflation will be much worse. It is best to prepare now.