CEO Of One Of The World's Largest Energy Majors "Sees No Reason For Petrodollar"

Tyler Durden's picture




 

The USA is fast running out of friends to support its 'exorbitant privelege'. Having alienated the Germans over NSA-eavesdropping, 'boomerang'd the Russians into de-dollarization, tariffed and quantitatively eased China into diversification, and finally 'punished' France into discussing the dollar's demise; it appears no lessor person than the CEO of Total (the world's 13th biggest oil producer and Europe's 2nd largest), believes "There is no reason to pay for oil in dollars." Clearly, based on Christophe de Margerie's comments, that we have passed peak Petrodollar.

 

As Reuters reports,

Oil major Total's chief executive said on Saturday the euro should have a bigger role in international trade although it was not possible to do without the U.S. dollar.

 

Christophe de Margerie was responding to questions about calls by French policymakers to find ways at EU level to bolster the use of the euro in international business following a record U.S. fine for BNP.

 

...

 

"There is no reason to pay for oil in dollars," he said. He said the fact that oil prices are quoted in dollars per barrel did not mean that payments actually had to be made in that currency.

So even a major beneficiary of the status quo appears to see the end in sight for the Petrodollar.

 

As we showed only yesterday...(and have ever since 2010)... nothing lasts forever

Meanwhile, somewhere Putin is still laughing.

As Brandon Smith concluded previously with regard the 'anything but random' nature of th emore frequent discussion of the dollar as resever currency:

The dollar is no more invincible than any other fiat currency in history. In some ways, it is actually far weaker than any that came before. The dollar is entirely reliant on its own world reserve status in order to hold its value on the global market. As is evident, countries like China are already dumping the greenback in trade with particular nations. It is utterly foolish to assume this trend is somehow “random” rather than deliberate. Foreign countries would not be initiating the process of a dollar dump today if they did not mean to follow through with it tomorrow. All that is left is for a cover crisis to be conjured.  Existing tensions in the Mideast signal a pervasive crisis, most likely an energy crisis, in the near term.

It appears that making friends and influencing people is the opposite of what America is achieving...at a time when it needs them the most.

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Sat, 07/05/2014 - 22:37 | 4928036 Seize Mars
Seize Mars's picture

All orchestrated, all 100% by design. G. Edward Griffin saw this coming in the 1960's and has tried to warn everyone within earshot ever since. This is about one world government. America must be brought low in order for this to work.

Destruction. That's what David Rockefeller and Lord Rothschild want.

Sat, 07/05/2014 - 22:49 | 4928059 economics9698
economics9698's picture

Zionist fucking up another country in 3…2…1

Sat, 07/05/2014 - 22:56 | 4928074 AlaricBalth
AlaricBalth's picture

June 2010 - "A new United Nations report on Tuesday called for the creation of a new global reserve currency to replace the U.S. dollar as the single major reserve currency.

"A new global reserve system could be created, one that no longer relies on the United States dollar as the single major reserve currency," said the report, titled World Economic and Social Survey 2010: Retooling Global Development.

"The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency," it said.

The report pointed to "a trap inherent in the reserve and payment system, whereby reserve-creating countries are able to run payments deficits as long as other countries find it in their interest to keep building up their international reserves in the currencies of the reserve-creating countries."

"If this trap is not eliminated, all financial regulatory reform will come to nought," it warned."

http://www.un.org/en/development/desa/policy/wess/wess_current/2010wess.pdf

Sat, 07/05/2014 - 23:09 | 4928088 DoChenRollingBearing
DoChenRollingBearing's picture

We only lose a little bit if the US dollar loses its "exorbitant priviledge".  We no longer would have to run trade deficits to keep the rest of the world with enough dollars to use in trade (ref: FOFOA).

We got along just fine for over a hundred years with out the reserve currency of the world.  And we will be fine with just another regional currency.

And the BRICs don't scare me either.  Boo!  LOL!  All of them have epic problems, worse than our own (which are pretty bad, and our direction is even worse).

So, what to do...  5% - 20% in gold is a great start!

Sat, 07/05/2014 - 23:12 | 4928101 economics9698
economics9698's picture

When we lose reserve currency status you will see $500 billion in merchandise disappear from the shelves.  That is when the crack up boom happens.

Sat, 07/05/2014 - 23:20 | 4928112 Antifaschistische
Antifaschistische's picture

we did fine without the Petrodollar...well, yes but there are many ways to look at that.  Perhaps America would ultimately be better off with $10 per/gallon gas AND the repatriation of tens of thousands of manufacturing and assemblying organizations.

The problem...is that America has no appetite for this line of work.  We think we're too good for it.  The generation who believed that hard work was the key to success is lost in America...and moved to Asia.   The reversion will be very painful.

Sat, 07/05/2014 - 23:28 | 4928126 economics9698
economics9698's picture

If you pay them they will work.

Sun, 07/06/2014 - 00:45 | 4928268 BlindMonkey
BlindMonkey's picture

Hell, if you don't pay them to sit on their asses they will work.

Sun, 07/06/2014 - 04:10 | 4928438 savagegoose
savagegoose's picture

THANKS OBAMA

Sun, 07/06/2014 - 06:34 | 4928520 Obese-Redneck
Obese-Redneck's picture

Don't thank Obama for the debt bubble, thank Bush morons.

Well FOFOA does call for the Euro as the next reserve or to come out on top after a US currency crisis, and yes it is all by design, the Russkies and the Chicoms now it and are in on it.

Sun, 07/06/2014 - 06:54 | 4928533 Ghordius
Ghordius's picture

I was not aware of FOFOA calling the EUR as the next reserve currency

I was aware of FOFOA reasoning on the future of money, fiat, currencies and gold on the same premises and in the same framework that led to the idea of the EUR

so FOFOA admires the elegant design, if you want. one that is neutral to the vagaries of the USD, gold, oil, whatever

one that is based on the incredibly simple premise that in order to import whatever the eurozone can't produce itself, be it Russian NatGas or Arab Oil or Chinese iPads, the eurozone has to match it with exports

it's about sustainability. one pillar of stability. sorry, stabeeleetee

note the political stance of the Banque of France. a country that has had a shift towards nationalism, and so a push to the government to "do something" and "do more" in regard to key political interests in the French industry, be it energy, shipbuilding or financials

and so you see this very special, very national bank taking a "national defence" stance... under the umbrella of the EUR/ECB. again, the EUR is behaving in the way gold used to... by design. of compatibility

Sun, 07/06/2014 - 08:43 | 4928653 Troublehoff
Troublehoff's picture

We got along just fine for over a hundred years with out the reserve currency of the world.  And we will be fine with just another regional currency.

 

Agreed DoChen...

but: a heroin adict used to get along fine without shooting up - there's going to be a very nasty period of cold turkey

Sun, 07/06/2014 - 13:18 | 4929189 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Only takes about 48 hours. It is not as bad many think. Hurts like hell for about 24 hours after that it smooths out.

Sun, 07/06/2014 - 17:55 | 4929831 Monty Burns
Monty Burns's picture

I can attest to the truth of this as an ex-user in my rock 'n' roll days.  Unpalatable fact is that anyone can get off heroin without too much grief if they really want to.

Sun, 07/06/2014 - 08:44 | 4928654 strannick
strannick's picture

@obesesredneck Obama brought the debt from 10 to 17 million, far and away more than any other President. Give credit where credit is due -pun intended.

Sun, 07/06/2014 - 10:21 | 4928794 moneybots
moneybots's picture

  "Obama brought the debt from 10 to 17 million, far and away more than any other President."

 

Not in percentage terms.  The debt tripled under Reagan and would have to go to 30 trillion to triple under Obama.

17 trillion doubles to 34 trillion.

17 trillion trples to 51 trillion.

 

Sun, 07/06/2014 - 12:38 | 4929073 sylviasays
sylviasays's picture

 "Obama brought the debt from 10 to 17 million, far and away more than any other President." Not in percentage terms.  The debt tripled under Reagan and would have to go to 30 trillion to triple under Obama."

Don't doubt Obama. If he can take the national debt from 10 trillion to over 17 trillion in just four years, he's got two more years (or probably more since it's hard to get Marxist dictators out once they get in) to ratchet the debt up to 34 or 54 trillion easy. 

Sun, 07/06/2014 - 10:30 | 4928815 dwayne elizando
dwayne elizando's picture

That's 17 trillion, not 17 million. ; ) I blame America as a whole. Obama is one man. Congress could've bound the federal reserve from assisting in the national debt bubble but they didn't. When that bubble blows, all the young debt surfs with their overpriced degrees will cry out for debt relief!

Fuck this shit makes me anxious!

Sun, 07/06/2014 - 10:32 | 4928709 Oracle 911
Oracle 911's picture

The crafty Russians and Chinese know one thing, on long run having the worlds reserve currency is deadly trap. That means they will avoid this situation much as possible. But the world need something, so they come up with "energy Ruble", but instead of kWh they will use BTU (both can be converted into J-well they are J), the only reason is this: the electrical energy is generated in power plants while the fuel is burnt. And these processes are everything but effective at lest 50% of energy from fuel is gone (the effectivity of electricity generation is fuel and technology dependent).

 

EDIT: There is another reason why the kWh won't be the king, the transportation. How you price in the transportation costs, when you use motors with internal combustion? (I know horsepower can be converted into kW. But what about the traffic jams, which are clearly here?)

Sun, 07/06/2014 - 10:59 | 4928885 centerline
centerline's picture

stabeeleetee is in conflict with the dogma of groooooooowth.  Must.... have.... growth.  Growth.  Growth.  Growth.  Chant it with me like.  Screw resource constraint.  Ignore demographics.  Nevermind the pressing social complexities.  Growth, growth, growth.

To infinity and beyond...

(p.s. Hawkins was right.  If we dont figure out how to get off this floating rock we are doomed as a species). 

Sun, 07/06/2014 - 11:27 | 4928949 _disengage_
_disengage_'s picture

I keep hearing talk about "getting off the planet". Does anyone realize that 1/3 of the Earth's land is desert? It is WAY easier to rehabilitate a desert on Earth than one on Mars...

Howard Finnel showed you can use on contour furrows/swlaes to infiltrate rain where it falls, stopping runoff/erosion and recharging the land/aquafers. This was in the 1930s.
https://www.youtube.com/watch?v=UFeylOa_S4c

in the 40-60s P.A. Yeomans showed how to rehabilitate Australian drylands with the Keyline Plan (just update Finnel's worked basically).
http://vimeo.com/13323213 (This farm is still active today and run by P.A.'s children)

Later Holmgren and Mollison put these ideas and more together into Permaculture.

Today people like Brad Landcaster, Alan Savory, Geoff Lawton, and many others are actively regreening deserts all over the world.
http://www.harvestingrainwater.com/
http://www.youtube.com/watch?v=YBLZmwlPa8A

Sun, 07/06/2014 - 14:00 | 4929283 americanreality
americanreality's picture

Hawkins?  Okay, dimwit.

Sun, 07/06/2014 - 14:25 | 4929342 TBT or not TBT
TBT or not TBT's picture

France hasn't shifted nationalist one little bit.   They have been all about national interests, read as interests of the state, since cardinal de Richelieu, and never stopped, you silly kniggets.  

Sun, 07/06/2014 - 08:01 | 4928592 stoneworker
stoneworker's picture

Until you have at least 50%-60% of oil producers "in on it" I don't think the dollar will collapse. I wonder what happens when the current Saudi passes away....

Sun, 07/06/2014 - 18:46 | 4929965 quadratic_equation
quadratic_equation's picture

You are not a redneck from your comment.  Your comment is closer to the logic of a negro which is very stupid.  When you ask a negro why Bush caused the debt bubble they say because he spend higher by percentage of the debt instead of the amount spent.  But if you can increase a small amount by hundreds in percentage it's still amounts lower than spending less percentage with large debt.  See here Bush spend $4.7trillion in 8 years to $10.3 trillion, that's close to 84% in spending from the level he started with.  While Obama raised the national debt to $17.4trillion; spending $7.1trillion in 6 years and that's only 67% increase.  When you spend it's the amount you spent that's important not the percentage.

Sun, 07/06/2014 - 02:08 | 4928365 Alcoholic Nativ...
Alcoholic Native American's picture

Says the government contractor. 

Sun, 07/06/2014 - 04:45 | 4928452 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

One has to appreciate the irony. =)

Sun, 07/06/2014 - 08:00 | 4928590 bentaxle
bentaxle's picture

It's in the interests of any absolutist monarch to ally itself with (absolutist) dictators, especially ones that can keep tabs on Syrian or other local Republics that are a little too close to home, that "live just round the corner."

Sun, 07/06/2014 - 06:43 | 4928529 Truthseeker2
Sun, 07/06/2014 - 10:42 | 4928848 dwayne elizando
dwayne elizando's picture

In death, we have a name! His name was petro dollar, his name was petro dollar!

Sun, 07/06/2014 - 18:55 | 4929986 quadratic_equation
quadratic_equation's picture

It's only dead if OPEC decides to renege on the treaty with the US but they will have to be prepared for ?.  It's takes both parties to sign the accord otherwise there's going to be hell to be paid.

Sat, 07/05/2014 - 23:42 | 4928147 edotabin
edotabin's picture

Bringing the jobs back is not as painful as you say. It is just a matter of the people experiencing a lot more pain without those jobs. As it stands the effects are being mitigated by EBT, loose policies etc.  When those stop, and they will, the pain felt will leave millions begging for those jobs to come back.

Besides, this is how it works. It is a controlled cycle:

1. Bring down

2. A few buy everything up for pennies on the dollar

3. Start rebuilding

4. Everything is great again! (only this time people make less, have less etc.)

Sat, 07/05/2014 - 23:56 | 4928188 SoberOne
SoberOne's picture

Well no shit, they killed the dollar and transferred wealth intentionally! 

Sun, 07/06/2014 - 11:15 | 4928928 KickIce
KickIce's picture

No doubt and if we allow the same assholes to retain power over the next reserve currency absolutely nothing will change.

Sun, 07/06/2014 - 10:32 | 4928820 moneybots
moneybots's picture

"Besides, this is how it works. It is a controlled cycle:

1. Bring down

2. A few buy everything up for pennies on the dollar

3. Start rebuilding"

 

A cycle always completes itself. Price inflation rate went up until 1980.  It could have gone up longer and in that regard it was a controlled reversal, but in every cycle there is an inflection point, where the cycle reverses.

By the way, nobody can buy up for pennies on the dollar, unless there is deflation, as prices have to deflate to be pennies on the dollar.

Sun, 07/06/2014 - 00:27 | 4928186 DoChenRollingBearing
DoChenRollingBearing's picture

Europe right now has $8.00 - $9.00 gasoline, and the euro (for now) is not a reserve currency.  And the taxes on gasoline are much higher than here.

Food is more expensive, but not too much more, than in the USA.

We would do just fine here.  Maybe even encourage companies to invest and people to actually, ah, work, and we might be better off!

 

EDIT:

We are a pretty entrepreneurial bunch as well.  Certainly vs. Europe.  We invented most modern electronics.  We invented Bitcoin.  Almost nowhere on Earth has a better climate for inventing than we do.

We do have our problems though, but our debts and demographics situations are better than in the BRICs or Japan or W Europe.

Sun, 07/06/2014 - 03:20 | 4928402 Lore
Lore's picture

Re: "our debts and demographics situations are better"

Correction: "Our debts and demographics situations are EXCEPTIONAL!"

Sun, 07/06/2014 - 05:16 | 4928475 Ayn-UK
Ayn-UK's picture

I'm living in Europe right now. Gas is $10 a gallon and food is about 60% higher than in the states. I was pricing a bissle furniture vacuum. On amazon US it was $25, on amazon UK it's £60. The exchange rate is around $1.70 to the pound. That's a huge difference. The same goes for cars, clothes, and especially food. A tiny sized can of cat food is over $1. A decent steak is $20 a pound.
I'm not complaining, we are here for our jobs and we knew what we were getting into, but don't fool yourself into thinking everyone will be just fine with less. The middle class have a much lower standard of living here.
Learn to love rump steaks and chicken because fillets and seafood will be out of reach for the average person. And be happy paying over $30k for a hatchback.

Sun, 07/06/2014 - 06:28 | 4928517 Obese-Redneck
Obese-Redneck's picture

Wait till gas prices hit rest of the world rates in USA. The f-350 wide load butt crowd are going to be screaming bloody hell. And when energy goes through the roof and literally 1/3 of the country that only functions because of air conditioning starts melting away the pounds inside of moldy dry wall McMansores, it's not going to be pretty. Long deodorant/anti-perspiration stocks my chubby friends.

Sun, 07/06/2014 - 07:18 | 4928556 Momauguin Joe
Momauguin Joe's picture

Soap, the yardstick of civilization.

Sun, 07/06/2014 - 15:45 | 4929504 Lore
Lore's picture

Re: "A tiny sized can of cat food is over $1."

Cat food is tasty. ...So I've heard. And you'll get a nice shiny coat. If times get REALLY tough, there's always the cat. 

/tongueincheek

Sun, 07/06/2014 - 07:08 | 4928547 barre-de-rire
barre-de-rire's picture

you invented bitcoin ?

 

lol

 

Satoshi Nakamoto sounds so american...  you do not invent, you do like chinese, you steal brevets....  suckers.

Sun, 07/06/2014 - 08:37 | 4928644 SumTing Wong
SumTing Wong's picture

No no no...we did it. We have Al Gore, who invented the Internet...and global warming so that he could trade carbon credits. The man needs to be sainted for all he has done for the U.S.

So Satoshi is nothing...it's Al Gore we all need to praise!

AlGorehu Akbar!!!!

Sun, 07/06/2014 - 09:13 | 4928679 pelican
pelican's picture

I never understood this line of reasoning. We made computers and are therefore are so much better? Yes, we spend tons on research and then have it stolen by countries who think we are suckers.

Does a good investor place all his eggs into one basket?

For a country to flourish diversity is essential.

Sun, 07/06/2014 - 11:05 | 4928897 Lea
Lea's picture

"We made computers and are therefore are so much better? Yes, we spend tons on research and then have it stolen by countries who think we are suckers."

And you are suckers, big time. Spend tons on research, outsource production to save your bucks through slave wages, get your technology stolen by the slave bosses.

Losers.

Sun, 07/06/2014 - 09:47 | 4928726 Winston Churchill
Winston Churchill's picture

I don't think you get it DoChen.

There is going to be a very abrupt change in the standard of living for most everyone.

All those paper claims on wealth will disappear.It will take a generation to relearn basic

manufacturing,to be a generation behind everyone else.

Britain never caught back up, and the USA has made enemies everywhere who will have no

interest in letting the US catch up.

Sun, 07/06/2014 - 12:00 | 4929015 centerline
centerline's picture

+1

Sun, 07/06/2014 - 11:58 | 4929011 centerline
centerline's picture

Oh come on DCRB.  The EU lacks a common debt.  That is the kiss of death (or recipe for war).  From a debt perspective - as screwed as anyone else.  As if the PIIGS are any better off?

EU is a socialist experiment that is about to go off the proverbial cliff (before the US).

Now, could it re-emerge as something different?  Yes!  Especially if it goes tits up first.  Assuming the world is not pounded back into a new dark ages, the first to repudiate onerous debt wins (as long as they are not invaded as a result).  Every soveriegn nation knows this and is eyeing the exits.  

 

Sun, 07/06/2014 - 09:16 | 4928683 Max Cynical
Max Cynical's picture

Serious question...

How will anyone know when the dollar loses reserve currency status?

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