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The Nail In The Petrodollar Coffin: Gazprom Begins Accepting Payment For Oil In Ruble, Yuan
Several months ago, when Russia announced the much anticipated "Holy Grail" energy deal with China, some were disappointed that despite this symbolic agreement meant to break the petrodollar's stranglehold on the rest of the world, neither Russia nor China announced payment terms to be in anything but dollars. In doing so they admitted that while both nations are eager to move away from a US Dollar reserve currency, neither is yet able to provide an alternative.
This changed in late June when first Gazprom's CFO announced the gas giant was ready to settle China contracts in Yuan or Rubles, and at the same time the People's Bank of China announced that its Assistant Governor Jin Qi and Russian central bank Deputy Chairman Dmitry Skobelkin held a meeting in which they discussed cooperating on project and trade financing using local currencies. The meeting discussed cooperation in bank card, insurance and financial supervision sectors.
And yet, while both sides declared their operational readiness and eagerness to bypass the dollar entirely, such plans remained purely in the arena of monetary foreplay and the long awaited first shot across the Petrodollar bow was absent.
Until now.
According to Russia's RIA Novosti, citing business daily Kommersant, Gazprom Neft has agreed to export 80,000 tons of oil from Novoportovskoye field in the Arctic; it will accept payment in rubles, and will also deliver oil via the Eastern Siberia-Pacific Ocean pipeline (ESPO), accepting payment in Chinese yuan for the transfers. Meaning Russia will export energy to either Europe or China, and receive payment in either Rubles or Yuan, in effect making the two currencies equivalent as far as the Eurasian axis is conerned, but most importantly, transact completely away from the US dollar thus, finally putin'(sic) in action the move for a Petrodollar-free world.
More on this long awaited first nail in the petrodollar coffin from RIA:
The Russian government and several of the country’s largest exporters have widely discussed the possibility of accepting payments in rubles for oil exports. Last week, Russia began to ship oil from the Novoportovskoye field to Europe by sea. Two oil tankers are expected to arrive in Europe in September.
According to Kommersant, the payment for these shipments will be received in rubles.
Gazprom Neft will not only accept payments in rubles; subsequent transfers via the ESPO may be paid for in yuan, the newspaper reported.
According to the newspaper, the change in currency was made because of the Western sanctions against Russia.
As a protective measure, Russia decided to avoid making its payments in US dollars, which can be tracked and controlled by the United States government, Kommersant reported.
"Protective measure" meaning that it was the US which managed to Plaxico itself by pushing Russia to transact away from the US Dollar, in the process showing the world it can be done, and slamming the first nail in the petrodollar's coffin.
This is not surprising to anyone who has been following our forecast of the next steps in the transition from the Petrodollar to the Gas-O-Yuan. Recall from April:
The New New Normal flow of funds:
- Gazprom delivering gas to China.
- China Gazprom paying in Yuan (convertible into Rubles)
- Gazprom funding itself increasingly in Yuan.
- Russia buying Chinese goods and services in Yuan (convertible into Rubles)
And all of this with the US banker cartel completely disintermediated courtesy of the glaring absence of the USD in any of the above listed steps, or as some may call it: from the Petrodollar to the Gas-o-yuan (something 40 central banks have already figured out... just not the Fed).
Still confused? Then read "90% Of Gazprom Clients Have "De-Dollarized", Will Transact In Euro & Renminbi" for just how Gazprom set the stage for the day it finally would push the button to skip the dollar entirely. Which it just did.
In conclusion we will merely say what we have said previously, and it touches on what will be the most remarkable aspect of Obama's legacy, because while the hypocrite "progressive" president who even his own people have accused of being a "brown-faced Clinton" after selling out to Wall Street and totally wrecking US foreign policy abroad, is already the worst president in a century of US history according to public polls, the fitting epitaph will come when the president's policies put an end to dollar hegemony and end the reserve currency status of the dollar once and for all, thereby starting the rapid, and uncontrolled, collapse of the US empire. To wit:
In retrospect it will be very fitting that the crowning legacy of Obama's disastrous reign, both domestically and certainly internationally, will be to force the world's key ascendent superpowers (we certainly don't envision broke, insolvent Europe among them) to drop the Petrodollar and end the reserve status of the US currency.
As of this moment, both Russia and China have shown not on that it can be done, but it is done. Expect everyone to jump onboard the new superpower axis bandwagon soon enough.
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Agreed...
I do however anticipate a cyber war unlike any war we could ever imagine...call it Cyber World War I (CWWI)
The world is totally different than it was just 20 years ago...it's totally connected.
Don't get me wrong, we'll continue to lob bombs on the ME in pursuit of our misguided foreign policy...but that'll be the side show.
FBI Said to Examine Whether Russia Tied to JPMorgan Hacking
http://www.bloomberg.com/news/2014-08-27/fbi-said-to-be-probing-whether-...
Add Au, Ag and Euroz to that list, comrades!
Nothing is going to happen. We have seen this shit before. The can will keep being kicked forever.
I agree.
Virtually every comment on here has agreed with the article's intentional 'idea' or 'mood', which is that this is crazy big news for the Fed, or the Dollar, and that it's going to cause a huge shift in the global reserve currency, blah blah blah.
Bullshit. Nothing will happen, the can will continue to be kicked down the road, and a new, manipulated currency will take its place, be just as oppressive, and most likely fiat, blah blah.. anything in the dollar's place will end up draining our wealth and enslaving us just like the rest of them.
The only thing we can do, I suppose, is refuse to use those currencies and instead use our gold. How do you get people to refuse?
Speaking of comments, notice how everyone wants to reply to the top comment strictly for placement? Hard to take such
comments seriously.
If this action is as huge as it is being claimed then why did Putin not do so a year ago? Either it is not going to be of much consequence or Putin is afraid of upsetting the west (or Putin is just in reactive mode). People are saying this is a start that will result in bigger things later. Well, that is further reason why Putin should have done this long ago, now there may not be time to sit and wait for the effect as the west will drive the situation and timeframe.
How much pipe has been laid to China? Why was Russia not off the SWIFT system several years ago (or have an alternative system in place), why is Libya gone, why the west allowed to isolate and then finish off Iraq the 2nd time, why was the west allowed to isolate and sanction Syria. Those inactions led to the west's proxy now fighting right at Russia's border (may soon be NATO). If Russia never intends to come to blows then the financial and commerce planning, prep and actions should have happened long ago.
And Russia does not appear to be willing to come to blows, Ukraine could have been curtailed through support when there were just nazis in the street and a few snipers. Instead it once again was "stand down", even as riot police were killed. Now look at the result. East Ukrain is kicking the West Ukrain's ass, doesn't matter, the west allies will fund the fight and the new Ukrain dictator will force men (cannon foder) into service to fight the east. They will bleed E Ukrain resources and wear them down. At some point you might see NATO put a base in a part of the E Ukrain that is secured and close to Russia. Then mission creep again.
Things will get difficult in W Ukrain but will the desperate people overthrow the radicals or will they be become compliant out of desperation when dependent for govt supplies to survive?
The "Big Deal" is that the USD will eventuality lose its GRC status, and be demoted to a Basket of RRCs (Regional Reserve Currency).
Other RRCs will include the Yuan, Euro, Ruble, Real, Rupee.
80 000 tons of oil is just 56 million in US dollars... its pocket change.
A single snowflake can cause an avalanche.
Whats your point again ?
My point is that as of right now its just a snowflake... we will have to wait and see how many snowflakes are yet to fall before the avalance starts.
How do you only see a snowflake in the blizzard of shit happening ?
Everything is, or will be, in place by this year end.
There will be no formal warning, and I don't know what the tipping point will be.
Churchill,
How do you arrive at eoy?
Is this assuming no 2016 elections?
Saudi Arabia, and whats going on in the Shanghai FTZ.
Everybody is so busy watching Putin, that the real action is going on
unnoticed.Watch the squirrel.
That G20 ultimatum will not be extended either.So I expect a lot happening over the
Christmas holiday.Just like the FedRes coup in 1913, its always a good time to catch the
unaware.
Thanks for your perspective.
thank you
The holes in the pocket always start small but get bigger with time
Remember, price is always set at the margins. And once the margin starts shifting, everything else will quickly follow, seeking an exit.
For a little fella, Putin has BIG BALLS.
I hope for his sake those balls are able to deflect an assassins bullet/ bomb/ polonium/ etc.
Putin isn't very tall, maybe 5'7".
Many years ago as a kid, I asked a Korean & Vietnam war vet if the Americans had an advantage over the Vietnamese since they were so much taller & bigger than them.
The vet replied, " I little finger can pull a trigger just as easily as a big one."
Putin seems like the kind of guy very willing to pull a trigger.
I asked another Vietnam vet the same question.
He replied, " If physical size was relevant, dinosaurs would still be in charge."
Note that the first vet was 6'1" and the other one was 6'2" tall.
Funny you should say that as I had considered a similar concept previously but from the perspective that the smaller chaps make a smaller target = distinct advantage.
Must be time for some European military 'exercises'.
1st Armored Cav at the rail yard to load up and head to Europe.
https://twitter.com/more_b4_9am/status/504384510473928704
@More_B4_9AM @lennutrajektoor @1stCavalryDiv @NATOpress new orders: move towards Ukraine and engage Russian invasion forces as they appear
tom @grillz0r 39m
@More_B4_9AM @lennutrajektoor @1stCavalryDiv @NATOpress maybe they will not mention when they cross borders, too. Ups...we are in UKR
People in countries who accept alternatives to the dollar for energy payments, get invaded.
To 'get rid of dictators' and 'bring democracy' of course.
Yes. And massive State Dept anti-Russia propaganda campaign on Twitter today via: #RussiainvadedUkraine #UkraineUnderAttack.
Yep, and we will lose big time.
So the first two guys bolt out of the room, lets wait for the next few guys to do the same, then all of a sudden a panic and everyone starts to bolt out of the room.
Human behaviour at its best, same as it ever was.
Russia is so fucked with this deal.
What did I say at 11:52 (5149326 ) today? Ah yes...
<-- Come November/Dec, Gas-for-Rubles, Euros and Yen
<-- Come November/Dec, Gas-for-Dollars
Gas-math exercise:
[1] Pay up, or it's "No Gas for You!"
[2] No gas = "No Soup for You!"
Solve equations [1] and [2] for the "Gas Root" of Geo-Politics. Tick, tock.
lol
first at your comment.
next at the people who don't see the humor.
+1
You really picked the perfect moniker.
Beat me to it wrt moniker
Checkmate for the 117th time
So the ultimate - and probably predictable - end results of "soft power" hegemony.
"So the ultimate - and probably predictable - end results of "soft power" hegemony."
Soft? When you were a kid in this Cold War and post-Cold War world, you often wondered what was wrong with the human species, who never seemed to be at peace. There was always a war going on in some part of the world, some coup, some civil war. And you despaired, because you thought we humans were always going to be animals, that we never seemed to learn.
And then you grow up, and you read, and you discover that 99% of these wars were fostered and sponsored by ONE single country: the USA.
http://williamblum.org/books/killing-hope
Yes. Soft power. America's official FP designed to spread American influence and democracy throughout the world. The hypocrisy of the term matches the rhetoric.
Soft power is a concept developed by Joseph Nye of Harvard University to describe the ability to attract and co-opt rather than coerce, use force or give money as a means of persuasion. In recent days the term has also been used in changing and influencing social and public opinion through relatively less transparent channels and lobbying through powerful political and non-political organizations.
Nye coined the term in a 1990 book, Bound to Lead: The Changing Nature of American Power. He further developed the concept in his 2004 book, Soft Power: The Means to Success in World Politics. The term is now widely used in international affairs by analysts and statesmen. For example, in 2007, CPC General Secretary Hu Jintao told the 17th Communist Party Congress that China needed to increase its soft power, and the US Secretary of Defense Robert Gates spoke of the need to enhance American soft power by "a dramatic increase in spending on the civilian instruments of national security – diplomacy, strategic communications, foreign assistance, civic action and economic reconstruction and development."
General Wesley Clark, when discussing soft power, commented that "it gave us an influence far beyond the hard edge of traditional balance-of-power politics."
Did somebody say nail gun? Oh, nail in the coffin. Nevermind. Carry on. When you need me just turn on the nail gun spotlight and I'll be along directly.
Putin' the nail in the coffin at 800 Rpm.
they're not accepting Draghi's rubber Euro?
Get real if US domination goes the EU is finished.
I wonder if Obama has called Al Sharpton yet for his opinion on this situtation???
too busy playing golf
Sharpton just informed the President from the Oval Office.
This has me simultaneously excited and nervous. Like each time the LSD starts to kick in and I wonder if this is the trip I'm not coming back from...
Ummmm.....what makes you think you came back the last time? Don't things seem a little 'off' to you?
FTA: "is already the worst president in a century".
It really just depends on your perspective and/or your goals. My guess this is all going according to plan. It's just not your plan.
Not coming back? Indeed.
Yep, all part of the plan.
Greg Morse makes a case with evidence he has amassed that A) DTCC holds all of US Stock Certificates (Cede & Company) B) That DTCC owns the FED and tells Public Corporations what to do like make back doors in computer chips... go to war... pass legislation... attack Libya & Iraq C) You don't really have good deed of trust on a mortgage set up with MERS D) Many US People will pay rent on houses that they think they paid off E) DTCC is behind setting up BRICS CB & Currency.
Oh, sure...like a guy with antlers can talk?
**dives under nearby couch, wild-eyed and sweating profusely**
Excellent screen name btw.
Funny you said that. I did LSD once, it was the worst experience of my life. With the world the way it is today, I often wonder the same thing.
It never wore off, the world is wonderful.
Poyote,mescallin or 'rooms were better Doc.
With the way things are, that may be the only way to make any sense of it all.
Sure feels like a bad trip we are living thru' right now.
Junior year in college my roommate and a few of his friends did some LSD. ( not me , I was a loser, and worked out six days a week , and saw no reason to piss my hard work away putting shit into my body ). This one poor bastard did a couple of hits, and it was his first time. No shit, it fried his brain, and he was never the same again. He left the dorm , and walked for miles in a downpour. The roomate followed him in a car for hours and finally got him back to the dorm around 4 or 5 in the morning.
Kid had to be locked up for a few months, and the next year when he came back to visit , he was like a zombie with aspergers or PTSD. I mean the nice normal kid was fucking totally gone. Scared the shit out of me. Worst part, the guys who gave him that shit kept on doing everything like it was okay. I am happy sticking to the occasional beer or J Walker.
Maverick
Maybe you're right. I attributed my perceptions to some sort of rip in space-time, but LSD flashbacks might be the cause.
But for 5 years?
That 5 year old stuff has got to be rotgut laced GMO.
The 40 year old stuff was top shelf.
If it was only acid....ahhh to dream.
RIPS
He just dropped in to see what condition his condition was in. ;D
Jeez...why do you do that to yourself? This other trip called reality is all the excitement you are ever gonna need. Frankly speaking it may be much more excitement than you crave or can handle.
“Today a young man on acid realized that all matter is merely energy condensed to a slow vibration, that we are all one consciousness experiencing itself subjectively, there is no such thing as death, life is only a dream, and we are the imagination of ourselves. Here's Tom with the Weather.” -Bill Hicks
This, more than anything else, explains the USA's rhetoric (and saber rattling) against Putin.
Finally, a headline that will be good for POG. Oh wait...
And perhaps also the sudden rise of ISIS and talk of Caliphate? Put some fear into Europe that they need the US?
http://redmillennial.files.wordpress.com/2014/07/isis-caliphate-map.jpg
...or like a thief in the night, steal it from the USSA.
We upset the established balance of power creating a vacuum, because we could.
Expect the rattling rhetoric to ratchet up big time. the long delayed black-box revelation that Russia was behind the shoot down has to be coming any...minute now.
And how dare the Chinese just go along with this effrontery, sanction them as well I say..
And Israel, buying 1/2 price American subsidized oil off the Kurds/ISIS/whoever.
Barry? hello?
"Friendly" countries have the black boxes already, and have dumped the contents. And suddenly MH17 dropped from the front page and Russia is accusing the countries involved of not being transparent.
They'll come up with a new false flag. This one has too many smoking guns pointing the wrong way.
And why Putin took back Crimea: He knew he could.
"finally puttin in action the move for a Petrodollar-free world"
Was that a pun?
What you meant to say is that "the USA has been PUT-IN a corner."
PUT-IN a Blender
PUT-IN a Blender
Fundamentally changing America, one paper cut at a time.
Fundamentally changing America, one paper cut roll of colored Charmin at a time.
Like this colored?
Ling chi - death by a thousand cuts.
The Chinese have perfected this over centuries. It should be no surprise that they are part of it's implementation now.
We are experiencing Ovomit's death of a thousand cuts.....Cloward Piven version.
While this action may be putting another nail in the coffin of the US printing press, we should nevertheless realise that the ruble and the yuan are just another two versions of shitty fiat.
...and when fraud is the status quo, possession is the law. Can't wait to see what happens when countries with real resources just decide to keep them for the betterment of their own populations...
...higher likelihood of being backed by real metal at a real price.
.....and that should include the U.S.
I suggest you look at how much oil is exported and imported in each country. Here's a helpful link...
http://mazamascience.com/OilExport/
be very careful what you wish for.
Well, we could always make Canada part of the USSA.
Their eign of error will be short-lived.
No government ever will disdain fiat money just because it's a fraud, exactly the opposite. The thing is, gold and silver are getting a chance to get rid of the manipulative price fixing scum. Maybe we are going to finally see how much gold there is at FED.
Might be more accurate to say 'Maybe we are going to finally see how much gold there isn't at FED'
"we should nevertheless realise that the ruble and the yuan are just another two versions of shitty fiat."
No. Putin has been making arrangements for months to back the ruble with gold. The minute he does it, it's the end of the dollar.
http://sprottmoneyblog.com/russia-hints-at-ushering-in-a-new-gold-backed...
Until China and Russia announce that they're each sitting on 20 tonnes (or more) of gold and the IMF can also stick their SDRs where the sun don't shine.
New checkmat of Russia, Gazprom in this case.
Very very good
You know things are bad when you miss Bush.
Celibacy is never easy.
It was all a misunderstanding. Simple clerical error.
The word was "Celebrate".
...... "we're going to kill the dollar"..... hmmmmmm seems the plan is rolling out nicely
Da Comrade, Obamski does financial sanctions, we do things so we do not care if he does them.
Can these twits ever think a half ply ahead in game theory. It sure doesn't look it.
If you think they're losing the game then they've already defeated you. Stop focusing on the script, and you'll quickly come to understand why things happen.
Putin on the Ritz!
We (U.S.) asked for it, over and over.
Fiat Wars
Let's see how Forex responds.
And now we might find out who has rubles...
How many FRNs need to be extinguished now to set the ship right?
Can't wait for Brazil (who exports a shit-ton of oil) to demand Real... ...or not, their inflatino is boarderline "hyper" already.
Perhaps they should just keep that oil and do something for their own people...
...oh wait... ...nevermind.
Ruble exchange probably as favorable as you're going to see it.
You can pick up (/easily gain exposure to) some RUR here, with very low fees: https://btc-e.com/
Bullish?
They should settle European accounts in physical gold.
Like the Saudis?
Accounts will never settle in gold. It is a horrid medium of exchange. It is clunky and works best hidden away underground only to see the light of day when needed.
Gold will be, as it has always been, a store of value. Let the world run on fiat while savers squirrel away a bit of gold as they are able. Get the governments of the planet out of the business of telling us the price of gold....they ALWAYS underestimate it's value for political puposes. Only the market (in physical gold) can tell us close to the right price.
Paper gold will die with the dollar. The central banks of the world know this and also know that gold alone can serve as their reserve....the right price will be found to make this work.
If you wonder why gold needs fiat...here is the best and one of the only explanations I've seen.
http://www.usagold.com/halldiscussion.html
Meh, fiat is subject to inflation - gold is not.
"In conclusion we will merely say what we have said previously, and it touches on what will be the most remarkable aspect of Obama's legacy, because while the hypocrite "progressive" president who even his own people have accused of being a "brown-faced Clinton" after selling out to Wall Street and totally wrecking US foreign policy abroad, is already the worst president in a century of US history according to public polls, the fitting epitaph will come when the president's policies put an end to dollar hegemony and end the reserve currency status of the dollar once and for all, thereby starting the rapid, and uncontrolled, collapse of the US empire."
Racism! As a blackie (well, half) he can do no wrong and all of this is because of the evil racists roaming the world. That and Bush. Bush's fault.
<--- Gazprom will also accept Gold/Silver/Platinum as payment
<--- Gazprom will also accept Belgian or Ukrainian chocolates as payment [cough, cough]
You'll know the plan is working when you're on a Russian website and you see a pop-up for American brides.
LOL, but that will never happen outside of masochists.com.
...and you better watch out for those photoshopped pretty faces.
Belgian chocolates are delicious though.
Not sure I want to try a Ukrainian one.
The Fed will start using NSA meta data as payment soon.
Gov will use Homeland Security ammo as payments.
Actually the 'first nail' was driven last Fall when the world's accumulation of treasuries stopped.
If the world's central banks do not save in our excess dollars then the USA will be like all other countries have ben through history...you print too much ...your currency becomes wort less and then worthless. This happens all the time, the entire world has been helping the USA by using the dollar as a reserve and thus taking those excess dollars off the world market. Now that this firendly gesture has ended (and it has) we will see how it ends.
We could see gradual onset of wheelbarrow hyperinflation or ,in this modern age of instant everything, we could see a sudden, unexpected glitch. Computer screens could suddenly flash...'no bid' and the world will marvel at the suddenness of it all.
"Now that this firendly gesture has ended (and it has) we will see how it ends."
My understanding is that in absolute terms the level of foreign purchases has not gone down but the buyers are taking those with shorter durations.
Yes there still are purchases but look at net holdings...not good for the dollar....especially the decrease from the central banks....that is where support comes from. When private buyers can't make money in the treasuries they will dump them in a hurry! Only central banks might hold dollars to support the monetary system.
fofoa has a couple of good recent posts looking at the declining support of the dollar...it seems that we are just being left to our fate. No one will give the final push...and the USA has no real politically acceptable way out.
The clock has been ticking louder for almost a year.
shorter durations which will need to be rolled over more frequently at higher rates. once you start rolling over shorter durations at higher rates, it ends quickly and Main Street will burn.
Which still means they're preparing for a timely exit. Until then, it's about picking up nickels in front of steam-rollers.
How did you go broke? Gradually, and then all of a sudden.
Saudi is the lynchpin of USD reserve status.
And we're doing our best to drive them out of the tent and towards the East.
Seriously, if the goal is to ruin the US's international relationships, kill the USD, and collapse the economy then I'm not sure you could come up with a better plan. Hence, this is not happening by accident or because someone couldn't anticipate these outcomes. It is happening precisely BECAUSE these outcomes were anticipated.
Only way any of this makes sense.
Too bad the Saudis do not have nuclear weapons. (yet)
I'll bet 28 pages of a 9/11 report that they financed the job. That makes their oil ours.
Actually I (and others) noted a few weeks ago the rhetoric has changed, and it's not to drive the Saudi's away, it's to justify the US invading them. There has been a huge uptick in coverage connecting the Saudis to 9/11 and a push to release the key redacted pages on the 9/11 report.
This is no accident.
I agree. But it's also been going on a lot longer than a few weeks.
Hmmm, I just saw a Roadrunner hauling ass down the road with something that looked like a pin it's beak
"Saudi is the lynchpin of USD reserve status."
I tend to agree. I don't see that Gazprom accepting alternate currencies nearly as big a deal as Saudi Arabia or other trading partners refusing to accept the dollar for goods we must have.
What does $10/gallon gas do to our econpmy?
Someone had to do it first. The Saudis couldn't do it first. The Russians seem to be the only ones that have the ability and the desire to do it.
America is broke and we cannot afford another arms race.
Further,we need to find employment and shrinks for all our combat veterans.
If you had to choose between a f-22 raptor and counseling for 100k of vets,which do you think would
have a greater benefit on our communities? $5 Trillion and what to show for it?
"we cannot afford another arms race"
Why not, as long as the Fed has printers? Worked so far....
USSR > USSA > 0
Look how far we've come, and so far to fall.
Is it a coincidence that this move away from the Dollar and the regional conflicts began in earnest after the Wall Street and Brussels bandits stole depositor's money in the banks of Cyprus?
That was pretty much a slap in the face with a glove from the West to the East as there was a lot of Russian money in those banks.
Anyone who thought a 'slap in the face' would be an effective deterrent is not paying attention. Simply cover for everything that followed.
What was that quote from our CIC to the Russian dude during the last election? Something like, "I'll have more flexibility after the election."
Wonder what he meant?
What are the contracts priced in? Yuan/Rubles? Or USD? If its just settlement currency I don't think it's as big a deal as if the contract price is set in the local currencies, as the real price hedge will still have to be local currency against USD if the contract price is USD.
Ok, but if only the hedging element is in dollars it means the vast bulk of the meaningful trade will be in yuan/rubles.
Selling to Europe - contracts priced in Euros.
Selling to China - contracts priced in Yuan.
If they remove the USD from the equation - it loses value by way of not being used as a unit of measure.
"Dollars? What are these Dollars you speak of?"
Yes, this is my point. If the USD isn't involved in pricing (either explicitly or as benchmark in the contract) then it becomes completely irrelevant. If its only the settlement that's non USD then the role of the USD is still significant.
Agreed. There is no point saying nail in coffin without knowing this key information.
Even if it does remain as a benchmark, it will still become irrelevant to all except those remaining who have to use dollars for oil, as the price will skyrocket as the petrodollars come back home (because I'm not expecting China, et al., to keep a dollar peg in such circumstances).
It can only remain relevant as long as the Fed has the ability to keep the dollar acting as the world's largest WMD.
As I posted elsewhere in this thread, the action occurs at the margins. Once they shift, so does everything else.
AH
I agree. The medium of exchange is not as important as the US government deficit. But lack of 'use' will drive the decision to abandon the dollar as the reserve. They now yield nothing and if they are not even required for trade...well there a lot of them out there. I'd say we are in end game for our currency.
Yes, agree. My comments are more to do with how far along the path we are, and specifically, how big the impact of this deal really is.
Washington DC's arrogance and belief in it's exceptionalism has been too smart by half. You can only go around kicking other nations in the balls for so long before they begin to kick back. Worse than that, they begin to gang up together and kick back. Instead of working with nations on fair trade and fair fiscal order, Washington DC is intent on Corporate Imperialism and Fiscal Fascism on a grand scale. DOllar Hegemony is used as the ultimate way of earning wealth without work. Nobody but Washington gets to print to infinity and have that fiat accepted as wealth, in return for manufactured goods, cheap services and energy. Other nations must drill and produce oil, mine minerals, run factories, innovate new service models, produce foods and consumer goods, and then ship it all to America at competitve prices and accept FIAT as their only reward.
I wonder, how long could that model last. One thing for sure, when Obama declares the Exceptional American model as a model we will enforce by force of arms, then you really get other nations ready to challange King Dollar.
This story is just beginning. American reaction will be swift, and likely involve more Proxy Wars, Trade Wars, Sanctions, threats, military build ups, spying for trade secrets, financial warfare and lastly CIA assassinations of foreign leaders who refuse to comply with the Washington DC concensus. Right now, that concensus is not as strong as the White House proclaims. The EU, Canada, UK, Australia, New Zealand all comply and follow orders as if they had no independent governments, but these are not all the world. Others are rising, and the EU is falling fast.
The war against King Dollar is on!
it will be interesting to see who goes next. Saddam and Gadhafi were likely taken out for currency reasons. The missle that downed that airliner might have been meant for Putin.
http://www.zerohedge.com/contributed/are-middle-east-wars-really-about-f...
"The missle that downed that airliner might have been meant for Putin."
there was NO ground based missile!
check the malaysian times - what are you promoting?
The Ukraine, Russia, and Obama have all said that it was a missile. I agree that the sources suck but I've not heard other info. If you have it, please enlighten me.
Yes, they all agree a missile was involved, but SAM or AAM, that is the million dollar question?
Finished off by air to air missle from the jet following the airliner. One of the credible theories.
We could end this peacefully (somewhat) if the Sheeple would only wake up, wise up and dissolve the federal government.
DOllar Hegemony is used as the ultimate way of earning wealth without work. Nobody but Washington gets to print to infinity and have that fiat accepted as wealth, in return for manufactured goods, cheap services and energy. Other nations must drill and produce oil, mine minerals, run factories, innovate new service models, produce foods and consumer goods, and then ship it all to America at competitve prices and accept FIAT as their only reward.
Nonsense. Didn't ZH publish an article not too long ago regarding Chinese printing outpacing ours? The common narrative needs to be rethought, as the answer is more complicated.
"If you like your dollar hegemony, you can keep your dollar hegemony."
Fiat Wars
Roll it up and put it there...in the boot.
Hiding it or burning it or selling it.
Gold, Silver and all tangibles will shine.