[misterno]

http://www.financialsense.com/contribut ... petro-yuan

[ROCKMAN]

M - Your thread ties well with my story about China moving very hard into the refining end of the trade. From

http://theeconomiccollapseblog.com/arch ... etrodollar

“The largest oil exporter in the Middle East has teamed up with the second largest consumer of oil in the world (China) to build a gigantic new oil refinery and the mainstream media in the United States has barely even noticed it. The petrodollar system was adopted by almost the entire world and it has had great benefits for the U.S. economy. But if China becomes Saudi Arabia's most important trading partner, then why should Saudi Arabia continue to only sell oil in U.S. dollars? And if the petrodollar system collapses, what is that going to mean for the U.S. economy?”

The new plant will be built in the EU backyard. Over the next 10 years it will refine $1.2 TRILLION (current price) in Saudi oil and sell about $1.4 $TRILLION in product… very likely to the EU. And that’s just one of many refineries that China is developing around the world. And even though I used $’s there will be no need for a single US buck to be used, And, for that matter, not a single Chinese yuan either. The EU consumers can pay in euros which China and Saudi can use to buy EU products…or use to buy from any other country since they all accept euros.

And unlike the Chinese strategy of controlling oil in the ground none of this oil going through the new refinery belongs to China…it belongs to the Saudis. These new plants will also be able to produce higher value products than the older plants especially in the US. Thus China can pay more for the crude they don’t control than most other refineries around the world. They may be just as glad to sell to US consumers who can pay the market price. But, if supplies grow short, they can chose to ship those products to China even if other global consumers can offer a higher price. During such times a govt mandate trumps the free market.

[AdamB]

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This might seem a frivolous question, while the dollar still retains its might, and is universally accepted in preference to other, less stable fiat currencies. However, it is becoming clear, at least to independent monetary observers, that in 2018 the dollar’s primacy will be challenged by the yuan as the pricing medium for energy and other key industrial commodities. After all, the dollar’s role as the legacy trade medium is no longer appropriate, given that China’s trade is now driving the global economy, not America’s. At the very least, if the dollar’s future role diminishes, then there will be surplus dollars, which unless they are withdrawn from circulation entirely, will result in a lower dollar on the foreign exchanges. While it is possible for the Fed to contract the quantity of base money (indeed this is the implication of its desire

[AdamB]

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China is taking its first steps towards paying for imported crude oil in yuan instead of the U.S. dollar, three people with knowledge of the matter told Reuters, a key development in Beijing’s efforts to establish its currency internationally. FILE PHOTO: U.S. Dollar and China Yuan notes are seen in this picture illustration June 2, 2017. REUTERS/Thomas White/Illustration/File Photo Shifting just part of global oil trade into the yuan is potentially huge. Oil is the world’s most traded commodity, with an annual trade value of around $14 trillion, roughly equivalent to China’s gross domestic product last year. A pilot program for yuan payment could be launched as early as the second half of this year, two of the people said. Regulators have informally asked a handful of financial institutions to prepare for pricing China’s crude imports in the yuan, said the three sources at

[AdamB]

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Just days after initiating its 'petroyuan' futures contract, and hours after an unprecedented announcement that China will pay for oil in yuan, The Global Times, the unofficial mouthpiece of the Chinese government, printed a remarkable story from 'one of its editors' highlighting the 'petroyuan' and its potential to topple the US Dollar as global reserve currency. The Shanghai debut of China's first yuan-denominated crude futures trading market on Monday proved a great success, with major domestic and foreign traders displaying active interest. Total turnover amounted to 18.3 billion yuan ($2.9 billion) on the first trading day. The market's better-than-expected performance is believed to have significantly contributed to the recent strength of the yuan on global currency markets. As China largely depends on crude imports, price volatility in the commodity market is a major impediment. It launched the crude futures market to address

[GHung]

If Trump succeeds in his little trade war with China, the Chinese won't have as many dollars to spend on oil or anything else (like treasury bonds). Not sure what effect 25+% on just about everything will have, but if you need or want new electronics, a cheap Chinese generator, power tools , on and on ....... you may want to go shopping soon. Scroll down for the long list:

https://assets.documentcloud.org/docume ... tative.pdf