Oil Priced in Yuan?
In my last post, I referred to the US habit of decapitating leaders of oil producers who attempted to sell their oil in other than US dollars.
During World War 2, economist John Maynard Keynes proposed a supranational currency, to be called the Bancor. It would facilitate international trade, and prevent large trade surpluses or deficits. It would be fair.
But, the dominant US imposed the US dollar as the currency of trade, in lieu of the Bancor. At that time, the US dollar was backed by gold. The US owned most of the gold, and was running a trade surplus. But the ill conceived Vietnam War changed all that. US dollars spent prosecuting that war were being exchanged for gold, depleting US gold reserves.
In 1971, the world's reserve currency became a fiat currency. No longer backed by gold, it could be created out of thin air. It was not backed by anything, other than US military might.
The 70s was the turning point.
Agreement was reached with the Saudis to sell their oil in US dollars. The US could create these dollars out of thin air. Every other country had to give up resources to get those dollars, and accept the exchange risk.
The World Bank and IMF were charged with getting countries into US denominated debt so that they could be extorted and controlled. Ukraine has the second highest IMF debt in the world.
It appears that the US free ride is petering out. It will continue on a smaller scale only because there are no currencies that can replace the US dollar for international trade.
From the 70s on, with news that there wasn't enough affordable dense energy, the US gave up on making, and began stealing, using various financial weapons. A kleptocracy was systematised so it could work 24/7 and be legal.
That the world has had enough of the US is an understatement. That its own citizens have had enough is also true. But being among the most brainwashed people on the planet, they're in a state of cognitive dissonance. The US has made a few dysfunctional friends, and lots of enemies.
The US sanctions on Russia are counterproductive. They will hurt the US and its entourage of yes men much more than their self declared enemies.
If they cared about their people, they'd let the Russians clean up Ukraine, while resuming trade with Russia. They'd be preventing economic collapse which benefits no one.
But, they say they will pump military aid into Ukraine, making it more difficult for Russia to minimise civilian casualties and shorten the war.
It's one thing to make announcements. It's another to get the weapons into Ukraine given the iron grip that the Russians have on Ukraine.
The Saudis are reported to be contemplating selling their oil to China in exchange for Yuan. Remember Libya and Iraq. Destroyed because they tried to do the same thing.
The evil empire is falling. It's hard to know what its leadership thinks and plans. It doesn't look like the populace know very much about anything. A month ago, they didn't know where Ukraine is located, and many still don't.
The few powers that have evaded US subjugation are sensing the moment, after years of biding their time.
The Russians are finally protecting their people in Ukraine, after 8 years of oppression.
The Saudis don't seem to be doing what they're told.
The Chinese will build their pipeline to the Saudis, thanks to the Taliban. It will be protected by Russia, China and Iran.
The Russians will withhold oil and fertiliser necessary for food production.
The Chinese will withhold goods.
Make no mistake, US and European citizens will be appalled at the high prices for everything, and the shortages, especially of gas.
US oil peaked sometime ago, and their elites sold their manufacturing to China for short term profit.
Who ever wins the oil, holds the power. They all know it.
These are dangerous times.
The nuclear powered empire is ruled by evil crazies. Its people are heavily armed and disunited. They're used to the US free ride, and riding on the debt train.
None of these governments have told their people that affordable dense energy is coming to an end, and what that means. They believe in renewables and worry most about climate change. The fact that governments have known for half a century isn't going to go down well with starving people.
The US may descend into civil war, and, God forbid, the old nutters might press the button ending everything. They've lived their corrupt lives after all.
Given the way that the US has ruled the world, it's inconceivable that they would ration the remaining energy to feed the world and neutralise the nuclear waste. Leopards don't change their spots.
And, if you're a brain washed, ignorant Australian, you're bound to be outraged at the actions of the Russian bully. Why weren't they similarly outraged about the Afghanis, Iraqis, Syrians etc etc?
When you're a vassal of a real bully, you don't think much about what the rest of the world thinks of you. But, they remember where you've been, and what you've done acting for the US. It's time to think about that, given that you don't own anything, have no oil and can't make anything. And your leader is the pathetic ScoMo.
"Australia is a lucky country run by second-rate people who share its luck." - Donald Horne
It's time we grew up, but I fear that it's too late.
This post is available at justthenews.com
Saudi Arabia may accept yuan instead of dollars for Chinese oil sales
Saudi Arabia and China are in discussions to price some oil sales in yuan instead of U.S. dollars in a slap to the Biden administration that would decrease the dominance of the American currency in the international petroleum market, sources told [The Wall Street Journal].
While Beijing and Riyadh have been in discussions on and off for several years about yuan-priced oil contracts, talks have accelerated recently due to U.S. security policies under President Joe Biden, people familiar with the issue told the newspaper.
The Saudis are angry with the United States for not assisting in their intervention in Yemen's civil war, started by Iranian-backed Houthi rebels in 2014. The Kingdom is also upset over the Biden administration's efforts to enter a nuclear deal with Iran.
Saudi officials also have expressed disapproval over Biden's chaotic withdrawal from Afghanistan in August 2021.
"I don't know which word to use, whether incompetence, carelessness, bad management — it was all a combination of those things," Saudi Prince Turki Al-Faisal told CNBC last year.
Saudi Arabia exports 6.2 million barrels of crude oil a day and has traded in dollars exclusively since 1974 when President Richard Nixon struck a deal with the kingdom by guaranteeing security.
China buys more than a quarter of all Saudi oil exports, according to the WSJ. If the sales are priced in yuan, it would be a major boost to China's currency as 80% of all global oil sales are done in dollars.
Beijing introduced yuan-priced oil contracts in 2018, but has been unable to successfully beat the dollar in the global oil market.
Relations between Saudi Arabia and China have grown increasingly friendly over the years as Beijing has helped the kingdom build ballistic missiles and other projects.
"China has been offering everything you could possibly imagine to the kingdom," a Saudi official told the WSJ.
Biden's relationship with Saudi Arabia has been less than friendly. During his campaign, Biden promised to make the kingdom a "pariah" for the 2018 killing of Saudi journalist Jamal Khashoggi.
The president vowed last year to "end the war in Yemen," and "all American support... including relevant arms sales."
The White House denied reports last week that officials in the United Arab Emirates and Saudi Arabia declined Biden's calls.
China is also buying more than three times the amount of oil from Saudi Arabia as the United States, whose purchases have been declining over the last several decades, the WSJ reported.
"The dynamics have dramatically changed. The U.S. relationship with the Saudis has changed, China is the world's biggest crude importer and they are offering many lucrative incentives to the kingdom," a Saudi official told the outlet.
While the Saudis intend to still do most oil transactions in dollars, if the move goes through, other producers may begin to price their oil in yuan also, sources said.
"If it is (done) now at a time of strong oil prices, it would not be seen negatively. It would be more seen as deepening ties with China," Monica Malik, chief economist at Abu Dhabi Commercial Bank, told the WSJ.