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China will start trading oil in Yuan on the Shanghai Energy Exchange in mid October bypassing the US dollar. In a similar move, Venezuela has just started to publish oil prices in Yuan signaling a move away from using the US dollar in oil trading. I expect Iran and Russia to do the same soon.
This is not a small problem. A coming trade war and military war between the US and China is in the cards. All the US dollars around the world will start coming home soon because countries trading oil in Yuan will have no use for them. Massive inflation will be the result.
Several years ago, a finance professor who used to meet with Bernanke from time to time was concerned that China had so much in US dollars (T-Bills and such) and that they could tank the US economy, but since much of their savings were invested in dollars, they'd lose a lot of their savings. China is divided into different government units, but I wonder if there was a plan to save US dollars, build up the economy, and work out a way to dump them to crush the US economy, even if they take a bit of a hit themselves.
I remember John Paul Jackson prophesying something about a Russia pipeline to remove the US from interference in terms of oil, something along those lines. This reminds me of that.
MrMan wrote:Several years ago, a finance professor who used to meet with Bernanke from time to time was concerned that China had so much in US dollars (T-Bills and such) and that they could tank the US economy, but since much of their savings were invested in dollars, they'd lose a lot of their savings. China is divided into different government units, but I wonder if there was a plan to save US dollars, build up the economy, and work out a way to dump them to crush the US economy, even if they take a bit of a hit themselves.
I remember John Paul Jackson prophesying something about a Russia pipeline to remove the US from interference in terms of oil, something along those lines. This reminds me of that.
Its my understanding the US owes China around $2 trillion (trade deficit) and will never be able to pay it back. At some point I expect China will say enough is enough and take their billions of dollars and dump them on the currency market. If there's no one willing to buy them you could see the dollar crash instantly. China doesn't need the US for anything, they even have plans to build their own internet.
Paranoia is just having the right information. - William S. Burroughs
China is a communist-orientated country, its income per person is fairly low, something around the level of Thailand, GNI per capita, including purchasing parity is around USD 15.000,- and in USA it is 58.000,-.
I see plenty of Chinese buying land in USA, but China does not even allow anybody - including its own Chinese citizens - to buy any land in China.
If USA is doing something and is willing to move out more and more of its production plants from China back to USA or elsewhere, it will send many thousands of Chinese workers jobless into the streets.
About the money itself, it's not a free currency, the exchange rate is regulated by the state, ordinary Chinese citizens cannot change their local currency into foreign currency as they like, there are limits and these limits can be changed anytime even down to 'Zero', just as it pleases the Chinese government.
Many countries keep a strong visa-restriction policy regarding Chinese citizens. There are only a few countries which welcome Chinese tourists visafree for good reason, as many turn out as nothing but illegal workers.
Extensive censorship within China about everything which might be not seen in a positive aspect by the Chinese government should also be mentioned.
Plenty of data delivered by the Chinese government about its economy turned out to be nothing but a fake.
I was in China for several days last year for a job interview. The English news show I saw was very positive, instead of depressing like in the US. The news was about how the government was instituting great new initiatives that would make people's lives better.
The trouble is, well, for one, oil isn't nearly as big of a commodity as it used to be. People who make claims of the importance of the petrodollar are idiots that don't understand just how meaningless selling and buying oil in dollars is. Next up, China's economy is on very uneasy footing right now, with growth staggeringly short of their goals and at a precipice of collapse should they ease too much one way or another. Devaluing one of their greatest value stores (and one of the very investments that ensures the value of their currency, as the Chinese Yuan is functionally backed by the faith of their US dollar reserves) would likely result on great instability. Finally, oil is not a very valuable currency at the moment- few would be willing to give up a good that they're making very little on for a currency that has questionable long-term stability.
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That's an interesting clip. It appears to be on that English language Russian TV channel, so it is a different perspective. It sounds a bit like a conspiracy theory to my American ears to hear that Sadam Hussein and Qadalfi were removed because they wanted to trade oil in something other than dollars.
Btw, I recall a man named John Paul Jackson prophetically predicting this deal many years ago.
China will launch its petro-yuan in less than 60 days which will crash the US dollar and the US markets instantly. Banks around the world will be closed. Consider yourself warned...
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"It takes far less effort to find and move to the society that has what you want than it does to try to reconstruct an existing society to match your standards." - Harry Browne
Winston wrote:How can a communist country crush the US? Didn't communism fail? Why didnt China collapse the same way the soviet union did?
China will announce the new petro-yuan sometime this year which will crash the petro-dollar.
China has grand ambitions to dethrone the dollar. It may make a powerful move this year
This year?
So far I did not notice anything like that.
Or maybe next year?
There was some idea to change the petro-dollar to the petro-euro.
The Euro is still despite all that problems they have the better currency compared to the Yuan.
The only one willing to play that game is Iran so far. The others still are with the petro-dollar as far as I know.
All currencies hinge on the US dollar. So no one wants to deflate it right? If the dollar goes then all currencies go. Remember? The bankers know this im sure.
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"It takes far less effort to find and move to the society that has what you want than it does to try to reconstruct an existing society to match your standards." - Harry Browne
Winston wrote:All currencies hinge on the US dollar. So no one wants to deflate it right? If the dollar goes then all currencies go. Remember? The bankers know this im sure.
Some have said the US dollar will be the last currency to crash to zero I'm not sure if that's true.
The Chinese Yuan is expect to become the reserve currency of the world sometime in 2018. Your going to see some serious stuff go down before that happens.
Paranoia is just having the right information. - William S. Burroughs
