Breaking: Petrodollar Cracks: Saudi Arabia Considers Accepting Yuan For Chinese Oil Sales

[jamal18]

USA has basically ruin USD system by sanctioning Russia, now many countries and (even businesses ) feel unsafe with their USD reserves, particularly the ones that think they ( or their countries) will be sanctioned by USA due to some issue in the future.

Yes, the financial implications are huge. A gold backed rouble, and perhaps an international yuan. The major players, Brazil, India etc, have not backed the US.

When the US says stand with us or them a lot of the world is saying'them'. This could be the end of the West as the dominant financial player.

 

[LeGenD]

Wish them good luck.

You will see in time.

 

[TheNoob]

You are looking at rebalancing measures:

1. Global trade with USA will be in USD.
2. Global trade with China will be in Yuan.

Predicted effects:

1. USD globally depreciates.
2. Yuan globally appreciates.

Americans will welcome a weaker USD in fact. They want to decouple from China and revive domestic manufacturing and improve their EXPORTS by extension.

Russia under Putin have made this possible.

From an american prespective, this should be a welcoming move into reviving old industries with new philosophies.

It is very welcome, but how many of the americans actually understand this given that their past 3 generations have only consumed and not produced in the right ratio to pick themselves up again.

I would say this will be a slow revival but ultimately good for the US industries.

 

[bananarepublic]

From an american prespective, this should be a welcoming move into reviving old industries with new philosophies.

It is very welcome, but how many of the americans actually understand this given that their past 3 generations have only consumed and not produced in the right ratio to pick themselves up again.

I would say this will be a slow revival but ultimately good for the US industries.

You'd be surprised how whiny the new generation of Americans are milleneials, zoomer, whatever you call them.
Do you expect them to work in manufacturing??

 

[TheNoob]

wonder almost everyone can see it how come the White House can't?

The govt can not because they will lose grip on statusquo temporarily so their current priority will be to hold onto it.

But as economies work, the fallout will bring out the plan B as China took the opportunity of itself being poor back in the day.

You'd be surprised how whiny the new generation of Americans are milleneials, zoomer, whatever you call them.
Do you expect them to work in manufacturing??

This is exactly why there will be hardships for them in the transition and in a 2 or 3 generations. Things will change.


In the same aspect, Chinese youth of today will be what the millennials and zoomers are in the next coming decades.

Things will switch and dominance will change.

The world will progress in different polarity as it did in the last century

 

[Wood]

The discussion between Saudi and China have been ongoing for more than 5 years now. Saudi - US relationship has been a rumored quid pro quo deal from the 70s. If US is not willing to guarantee Saudi security interests like it promised to, then the Saudi have no reason to honor their commitment.

The Petro dollar phenomenon may be waning regardless of this move by Saudi's to accept part of the Chinese oil contracts for Yuan payment. In the coming decades, green energy technologies will slowly erode oil use - so this phenomenon always had an expiry date. Many analysts believe that even in a post oil world, the reserve currency status of USD is likely to continue because of US trade with countries and the geo political alignment of western world. Time will tell how things turn in the long run.

The only constant is change itself

 

[Meengla]

From an american prespective, this should be a welcoming move into reviving old industries with new philosophies.

It is very welcome, but how many of the americans actually understand this given that their past 3 generations have only consumed and not produced in the right ratio to pick themselves up again.

I would say this will be a slow revival but ultimately good for the US industries.

Yup.
We need industries in America back.
PS. I remember watching an interview of Ron Paul (father of Senator Rand Paul) some months ago. When Ron was asked why are we [Americans] giving so much money to China for manufacturing?? Ron wryly smiled and said: 'We give them paper and they give us real products back for that'.

 

[beijingwalker]

Many analysts believe that even in a post oil world, the reserve currency status of USD is likely to continue because of US trade with countries and the geo political alignment of western world. Time will tell how things turn in the long run.

The only constant is change itself

 

[Wood]

View attachment 824367

You think that I would not know this?

 

[K_Bin_W]

People who make fun of dollar collapse keep in mind such things do not happen overnight but it takes time. But one thing is for sure it is heading in that direction it will be a gradual shift to non-dollar-related transactions but eventually it will happen.
A 1000 mile journey starts with the 1st step and when the caravan moves the dogs bark.

 

[beijingwalker]

The world is sick and tired of being sanctioned by US and its lackeys, it needs a change so in the future if US again threatens to sanction someone, we can say: Go ahead and good luck.

 

[Muhammed45]

Truly sad moments for US lovers

You will see in time.

Nothing can challenge china's cheap labor force. That was why western companies transferred their production lines into China.

What can the west do after all?

 

[LeGenD]

From an american prespective, this should be a welcoming move into reviving old industries with new philosophies.

It is very welcome, but how many of the americans actually understand this given that their past 3 generations have only consumed and not produced in the right ratio to pick themselves up again.

I would say this will be a slow revival but ultimately good for the US industries.

Indeed.

Glad to see a member who understands these matters.

Americans have advocated for weaker USD before:

The benefits of a lower dollar: How the high dollar has hurt U.S. manufacturing producers and why the dollar still needs to fall further

The current decline in the dollar will provide a much-needed stimulus to the U.S. economy. The falling dollar will bring especially welcome relief to the internationally competitive U.S. manufacturing sector, which has suffered disastrous consequenceslost jobs, reduced profits, and decreased...

www.epi.org

Is a Strong Dollar Better than a Weak Dollar?

Americans were unable to control USD flows (and value by extension) but have found a solution finally. Putin gave it to them.

Weaker USD does not suggest that USA is finished. USA is 2nd largest NET EXPORTER of goods in the world:

Top exporting countries 2023 | Statista

China was, by far, the top exporting country in 2023. It exported for almost 1.4 trillion U.S. dollars more than second placed Untied States did.

www.statista.com

Weaker USD can facilitate American manufacturing industrial growth and employment generation.

China has benefitted much from a controlled Yuan on the other hand. Chinese manufacturing industries remained globally competitive by extension.

With more and more transactions shifting towards Yuan, its value will appreciate over time and this dynamic will have wider implications for Chinese manufacturing industries among other effects.

Long-term rise in China’s yuan could hurt economy: former top official

Guan Tao, a former senior official at the State Administration of Foreign Exchange, says long-term appreciation of the yuan could hurt job creation among small exporters, damaging efforts to boost domestic demand.

www.scmp.com

China will have to re-adjust its economic system by extension. There are trade-offs in this matter.

Things are moving towards this direction:

1. Global trade with USA will be in USD.

2. Global trade with China will be in Yuan.

Predicted effects:

1. USD globally depreciates (revival of American domestic manufacturing and increase in NET EXPORTS possible).

2. Yuan globally appreciates (economic restructuring as the way forward).

 

[Rafi]

Empireal over reach.

Indeed.

Glad to see a member who understands these matters.

Americans have advocated for weaker USD before:

The benefits of a lower dollar: How the high dollar has hurt U.S. manufacturing producers and why the dollar still needs to fall further

The current decline in the dollar will provide a much-needed stimulus to the U.S. economy. The falling dollar will bring especially welcome relief to the internationally competitive U.S. manufacturing sector, which has suffered disastrous consequenceslost jobs, reduced profits, and decreased...

www.epi.org

Is a Strong Dollar Better than a Weak Dollar?

Americans were unable to control USD flows (and value by extension) but have found a solution finally. Putin gave it to them.

Weaker USD does not suggest that USA is finished. USA is 2nd largest NET EXPORTER of goods in the world:

Top exporting countries 2023 | Statista

China was, by far, the top exporting country in 2023. It exported for almost 1.4 trillion U.S. dollars more than second placed Untied States did.

www.statista.com

Weaker USD can facilitate American manufacturing industrial growth and employment generation.

China has benefitted much from a controlled Yuan on the other hand. Chinese manufacturing industries remained globally competitive by extension.

With more and more transactions shifting towards Yuan, its value will appreciate over time and this dynamic will have wider implications for Chinese manufacturing industries among other effects.

Long-term rise in China’s yuan could hurt economy: former top official

Guan Tao, a former senior official at the State Administration of Foreign Exchange, says long-term appreciation of the yuan could hurt job creation among small exporters, damaging efforts to boost domestic demand.

www.scmp.com

China will have to re-adjust its economic system by extension. There are trade-offs in this matter.

Things are moving towards this direction:

1. Global trade with USA will be in USD.

2. Global trade with China will be in Yuan.

Predicted effects:

1. USD globally depreciates (revival of American domestic manufacturing and increase in NET EXPORTS possible).

2. Yuan globally appreciates (economic restructuring as the way forward).

Yes, but a side affect for the mid to long term will be high inflation, that will lead to lower living standards for the middle class in America.

 

[Hakikat ve Hikmet]

Wasn't there an agreement, written in stone, and backed by military force that the Arabs will only sell oil in US dollars?

This is mind blowing.

King Faisal lost his life because of his intention to have an independent oil policy. Let's see how far MBS can go...