Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on September 16, 2017
Suddenly, “De-Dollarization” Is A Thing
For what seems like decades, other countries have been tiptoeing away from their dependence on the US dollar.
China, Russia, and India have cut deals in which they agree to accept each others’ currencies for bi-lateral trade while Europe, obviously, designed the euro to be a reserve asset and international medium of exchange.
These were challenges to the dollar’s dominance, but they weren’t mortal threats.
What’s happening lately, however, is a lot more serious.
It even has an ominous-sounding name: de-dollarization. Here’s an excerpt from a much longer article by “strategic risk consultant” F. William Engdahl:
Gold, Oil and De-Dollarization? Russia and China’s Extensive Gold Reserves, China Yuan Oil Market
(Global Research) – China, increasingly backed by Russia—the two great Eurasian nations—are taking decisive steps to create a very viable alternative to the tyranny of the US dollar over world trade and finance. Wall Street and Washington are not amused, but they are powerless to stop it.
So long as Washington dirty tricks and Wall Street machinations were able to create a crisis such as they did in the Eurozone in 2010 through Greece, world trading surplus countries like China, Japan and then Russia, had no practical alternative but to buy more US Government debt—Treasury securities—with the bulk of their surplus trade dollars. Washington and Wall Street could print endless volumes of dollars backed by nothing more valuable than F-16s and Abrams tanks. China, Russia and other dollar bond holders in truth financed the US wars that were aimed at them, by buying US debt. Then they had few viable alternative options.
Viable Alternative Emerges
Now, ironically, two of the foreign economies that allowed the dollar an artificial life extension beyond 1989—Russia and China—are carefully unveiling that most feared alternative, a viable, gold-backed international currency and potentially, several similar currencies that can displace the unjust hegemonic role of the dollar today.
For several years both the Russian Federation and the Peoples’ Republic of China have been buying huge volumes of gold, largely to add to their central bank currency reserves which otherwise are typically in dollars or euro currencies. Until recently it was not clear quite why.
For several years it’s been known in gold markets that the largest buyers of physical gold were the central banks of China and of Russia. What was not so clear was how deep a strategy they had beyond simply creating trust in the currencies amid increasing economic sanctions and bellicose words of trade war out of Washington.
Now it’s clear why.
China and Russia, joined most likely by their major trading partner countries in the BRICS (Brazil, Russia, India, China, South Africa), as well as by their Eurasian partner countries of the Shanghai Cooperation Organization (SCO) are about to complete the working architecture of a new monetary alternative to a dollar world.
Currently, in addition to founding members China and Russia, the SCO full members include Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and most recently India and Pakistan. This is a population of well over 3 billion people, some 42% of the entire world population, coming together in a coherent, planned, peaceful economic and political cooperation.
Gold-Backed Silk Road
It’s clear that the economic diplomacy of China, as of Russia and her Eurasian Economic Union group of countries, is very much about realization of advanced high-speed rail, ports, energy infrastructure weaving together a vast new market that, within less than a decade at present pace, will overshadow any economic potentials in the debt-bloated economically stagnant OECD countries of the EU and North America.
What until now was vitally needed, but not clear, was a strategy to get the nations of Eurasia free from the dollar and from their vulnerability to further US Treasury sanctions and financial warfare based on their dollar dependence. This is now about to happen.
At the September 5 annual BRICS Summit in Xiamen, China, Russian President Putin made a simple and very clear statement of the Russian view of the present economic world. He stated, “Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”
To my knowledge he has never been so explicit about currencies. Put this in context of the latest financial architecture unveiled by Beijing, and it becomes clear the world is about to enjoy new degrees of economic freedom.
China Yuan Oil Futures
According to a report in the Japan Nikkei Asian Review, China is about to launch a crude oil futures contract denominated in Chinese yuan that will be convertible into gold. This, when coupled with other moves over the past two years by China to become a viable alternative to London and New York to Shanghai, becomes really interesting.
China is the world’s largest importer of oil, the vast majority of it still paid in US dollars. If the new Yuan oil futures contract gains wide acceptance, it could become the most important Asia-based crude oil benchmark, given that China is the world’s biggest oil importer. That would challenge the two Wall Street-dominated oil benchmark contracts in North Sea Brent and West Texas Intermediate oil futures that until now has given Wall Street huge hidden advantages.
That would be one more huge manipulation lever eliminated by China and its oil partners, including very specially Russia. Introduction of an oil futures contract traded in Shanghai in Yuan, which recently gained membership in the select IMF SDR group of currencies, oil futures especially when convertible into gold, could change the geopolitical balance of power dramatically away from the Atlantic world to Eurasia.
In April 2016 China made a major move to become the new center for gold exchange and the world center of gold trade, physical gold. China today is the world’s largest gold producer, far ahead of fellow BRICS member South Africa, with Russia number two.
Now to add the new oil futures contract traded in China in Yuan with the gold backing will lead to a dramatic shift by key OPEC members, even in the Middle East, to prefer gold-backed Yuan for their oil over inflated US dollars that carry a geopolitical risk as Qatar experienced following the Trump visit to Riyadh some months ago. Notably, Russian state oil giant, Rosneft just announced that Chinese state oil company, CEFC China Energy Company Ltd. Just bought a 14% share of Rosneft from Qatar. It’s all beginning to fit together into a very coherent strategy.
Meanwhile, in Latin America:
De-Dollarization Spikes – Venezuela Stops Accepting Dollars For Oil Payments
(Zero Hedge) – Did the doomsday clock on the petrodollar (and implicitly US hegemony) just tick one more minute closer to midnight?
Apparently confirming what President Maduro had warned following the recent US sanctions, The Wall Street Journal reports that Venezuela has officially stopped accepting US Dollars as payment for its crude oil exports.
As we previously noted, Venezuelan President Nicolas Maduro said last Thursday that Venezuela will be looking to “free” itself from the U.S. dollar next week. According to Reuters, “Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,” Maduro said in a multi-hour address to a new legislative “superbody.” He reportedly did not provide details of this new proposal.
Maduro hinted further that the South American country would look to using the yuan instead, among other currencies.
“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro also said.
The state oil company Petróleos de Venezuela SA, known as PdVSA, has told its private joint venture partners to open accounts in euros and to convert existing cash holdings into Europe’s main currency, said one project partner.
This first step towards one or more gold-backed Eurasian currencies certainly looks like a viable and — for a lot of big players out there — welcome addition to the global money stock.
Venezuela, meanwhile illustrates the growing perception of US weakness. It used to be that a small country refusing to take dollars could expect regime change in short order. Now, maybe not so much.
Combine the above with the emergence of bitcoin and its kin as the preferred monetary asset of techies and libertarians, and the monetary world suddenly looks downright multi-polar.
67 Comments on "Suddenly, “De-Dollarization” Is A Thing"
MASTERMIND on Sun, 17th Sep 2017 8:31 pm
Philippines’ Duterte asks head of human rights agency: ‘Are you a pedophile?’ -Reuters
LOL Makati1 your president is total nutter. Just like you! You slimy Asian Carp!
makati1 on Sun, 17th Sep 2017 8:40 pm
MM, did you read the whole article and understand it? Obviously not. The understanding part for sure. Perhaps you cannot understand the context? Nor do you understand the Philippine culture. Nothing out of place in his comment as far as Filipinos are concerned. They talk plain here.
BTW: Hypocrisy is common in the US. You are a perfect example. LOL
MASTERMIND on Sun, 17th Sep 2017 9:52 pm
Children swimming in garbage in the Philippines ! INSANE!
https://imgur.com/a/DFzhW
Cloggie on Mon, 18th Sep 2017 1:50 am
makat and clog, do everything in their power to diminish the US including warping the truth. They are flaming anti-Americans
Davy wants to see America loved irrespective of its behavior. That doesn’t fly. It is the same with “anti-semitism”. These folks have been persecuted for millennia and never ask themselves why that is.
who hilariously promote their home regions as the next superpowers
Never said that Europe wold be the new super power but I did say that China is going to replace the US as the next super power. I have also said that the US empire doesn’t to be taken serious anymore and is as good as dead. I have also said that a confederation of Europe, Russia, Ukraine, Belorus and European-America (Heartland USA) is strong enough to balance China, so that the European world could still be the first address on this planet. For “racist” shouters like you, sisspuss, boat and ghung we can find a nice little place in Trans-Appalachia… after the break.
who will experience a coming golden age.
You are willingly distorting things. I have several times linked to that vice-CEO of the largest fund in the world, who predicted a Golden Decade for Europe, not golden age.
https://www.youtube.com/watch?v=PM9_PrBoq9Q
I’ll take this guy much more serious than a goat Shepherd from Missouri and closet imperialist, who claims to have deep insight in international finance. The time that I took amateurs and collapseniks like Richard Heinberg, Gail Tverber or medical guy Chris Martenson serious is long over.
Somehow in this mental lite process the US will be utterly and completely destroyed.
Falling apart in a process of secession, not “completely destroyed”. The list of folks/newspapers who hinted at a civil war over the last month included: Kunstler, Buchanan, Roberts, Newsweek and that is those I can remember. There were more.
https://www.theguardian.com/us-news/2017/aug/20/civil-war-american-history-trump
https://www.newyorker.com/news/news-desk/is-america-headed-for-a-new-kind-of-civil-war
And there are more prominent names.
Cloggie on Mon, 18th Sep 2017 2:06 am
More signs that the influence of the US empire is waning:
Orbán wins the migration argument
Suddenly most EU leaders echo the Hungarian prime minister.
http://www.politico.eu/article/viktor-orban-migration-eu-has-won-the-argument/
Only former Stasi agent and unrepentant communist Merkel continuous to suck up to the US deep state.
https://www.youtube.com/watch?v=0-DrCwhCAOA
And boy is she hated for it. It is 1989 all over again, the year of the downfall of the Soviet empire. Now the US empire is next and the subsequent restoration of Old Europe.
Cloggie on Mon, 18th Sep 2017 4:11 am
“Huh? The US is a net oil importer and the US refining capacity matches US consumption.”
Typical Coggy make believe. The US imports 6 mb/d and exports 6 mb/d of finished products. It is the largest exporter of finished products in the world
I gave you the links at “Cloggie on Sun, 17th Sep 2017 2:55 am”, for Christ sake.
The US consumes 20 MBD of finished products and refines 19.x MBD of finished products.
So please explain to me how the US can be the “largest (nett) exporter of finished products in the world”.
Davy on Mon, 18th Sep 2017 5:50 am
“Davy wants to see America loved irrespective of its behavior.”
Davy likes reality not fantasy and agenda. There is no loving a bully and no putting lipstick on a pig but you are also a pig and you will be a bully if given another chance. You have proven over many more centuries than the US how awful a people you can be. All the worst of what has happened in the world is a product of European civilization.
Davy on Mon, 18th Sep 2017 5:52 am
“Never said that Europe wold be the new super power but I did say that China is going to replace the US as the next super power.”
I am saying there are no more superpowers “to be”. You are lost in history revisions and future fantasies of fictions for personal emotional reasons. I am looking for the cold hard truth. The difference between us is you talk everyone else down and yourself up. I am talking everyone down.
Davy on Mon, 18th Sep 2017 5:56 am
You are willingly distorting things. I have several times linked to that vice-CEO of the largest fund in the world, who predicted a Golden Decade for Europe, not golden age.
Geeze, and you believe in prophets of capitalism? You really think because these thieves have money that you can believe what they say? He said what you wanted to here and that is music to your ears. You are approaching your shelf life clog and another golden decade sounds so soothing. A vice-CEO of the largest fund in the world is a scumbag who is part of what is wrong and he is going to say exactly what will make his stupid fund richer and you believe it snake oil sucker.
Cloggie on Mon, 18th Sep 2017 6:02 am
All the worst of what has happened in the world is a product of European civilization.
And the best. The exquisite. The High Art. The style. The sort of civilization everybody wants to be part of to parasitize upon it.
European civilization has out-shined everybody else including America.
And the worst, the nuclear bomb btw, was a Jewish invention, just like Marxism, Bolshevism and multiculturalism.
And if everything goes wrong in the US, you will flee… where to?… to Italy! ROFL
Please line up behind the Africans and Muslims and wait for your turn to be let in indefinitely. You are just jealous that your “shining city upon a hill” is about to breakdown and fail, just like your WW2 brother the USSR, for no other reason than that the European Americans were unable to generate an elite that could withstand the global maffia.
Davy on Mon, 18th Sep 2017 6:02 am
“Falling apart in a process of secession, not “completely destroyed”.
Oh, how nice the cogged says it will only hurt a little and then I will like it. Go fuck yourself sir. I hope you take it in the ass hard by Mohamed. How’s that clog? Is that hurt enough? You are so friggen stupid. Do you really think civil war in this day and age is going to not result in mass loss of life? Yet, to a white racist asswipe you see that loss of life as acceptable because it is US loss of life and many of those US citizens are brown. That fits in with your final solution. You can then send in the Grand Euro army to mop up the mess and save the Amerowhities. Then the golden age of Paris Berlin Moscow in tandem with mkats golden Asian Century will commence. It all hinges on the destruction of the US. No wonder you two have nightly wet dreams. You both are sick old men
Cloggie on Mon, 18th Sep 2017 6:19 am
Geeze, and you believe in prophets of capitalism?
Why should I not? Capitalism was the most successful economic system in world history, that began btw in Holland of the 17th century. It is in my bones.
https://www.youtube.com/watch?v=zPIhMJGWiM8
You really think because these thieves have money that you can believe what they say?
What evidence do you have that he is a “thief”. You call everybody a thief you do not like, like Putin. And of course never give any proof.
I understand that you hate Hildebrandt for saying that Europe could do well in the coming ten years, because that is an “anti-American” thing to say, because everybody knows or should know, that America is “exceptionalist”.
/snicker
He said what you wanted to here and that is music to your ears.
Yeah, but not to your ears.
you believe it snake oil sucker.
Oops, Davy is fuming for anger. Me not so much.
Perhaps Italian customs should contemplate making a plate to welcome the guests from the New World:
“Give me your tired, your poor, your huddled Americans, yearning to breathe free.”
America is coming full circle. A (((certain group))) won and succeeded in destroying America. Congratulations Apneaman. Oh and en passant you destroyed the only stick you had to terrorize the rest of the world with.ROFL
Now how smart is that?
End good, all good.
Bye-bye…
https://www.amazon.com/Jewish-Century-Yuri-Slezkine-ebook/dp/B005646E32/ref=sr_1_1
makati1 on Mon, 18th Sep 2017 6:24 am
Cloggie, you cornered the PO bully and again he resorted to name calling, the refuge of a loser.
Yes, interesting that he is putting down the same area of the world that he HOPES he can flee to when the SHTF in America. Your comment about getting in line behind those worthy of refuge was hilarious. My aunt is Italian. I would not go there if you paid me to.
Cloggie on Mon, 18th Sep 2017 6:27 am
Oh, how nice the cogged says it will only hurt a little and then I will like it.
You can entirely blame yourself for it for by not lifting a finger to protect your country. And deep in your heart you have no country to protect. You are the greatest anti-American on this board and the greatest American imperialist. You were perfectly content throughout your life to support a regime that was busy setting up a global empire and your grudgingly went along with mass immigration until it was even too much for you when you voted for Trump last year, when you knew that a global US empire was not going to happen and that Third World USA was next.
Go fuck yourself sir. I hope you take it in the ass hard by Mohamed.
Not going to happen.
Brussels knows that soon they won’t need to follow orders from Washington anymore and they are already preparing with measures to escape popular wrath. Could be too late, but apart from Stasi Agent and Washington c*ck sucker Merkel, nobody is advocating open borders anymore. Wait for the ritual political slaughter of Merkel in the near future.
http://www.politico.eu/article/viktor-orban-migration-eu-has-won-the-argument/
Victor Orban won the debate on immigration (not Merkel).
Davy on Mon, 18th Sep 2017 6:50 am
The two senile old men on the board. Both soon to be in diapers or in a home getting there ass wiped and sponge baths. You two don’t really think reality works according to your fictional fantasy creations do you? You two think you create a life around you and find comfort in that. A golden age for your golden years. LMFAO at the old dumbasses. You put down those you hate and talk up yourselves. That is about as elementary a human confusion as man has ever indulged in and in your case just early onset dementia. Quit your whining mkat about “put downs”. You and clog live by put downs and your expressions of self-grandiosity. Sickening
GregT on Mon, 18th Sep 2017 10:24 am
Your condition continues to deteriorate Davy. Go and talk with your shrink, before you reach the point of no return.
Davy on Mon, 18th Sep 2017 10:52 am
Grehg, say something intelligent and we can debate otherwise you are just another asswipe acting stupid.