World Rushes to De-Dollarize Oil Trade Before US Economy Crashes and Burns

[Hasbara Buster]

World Rushes to De-Dollarize Oil Trade Before US Economy Crashes and Burns

Russia, China, India and other emerging powers are pushing for a multipolar world; meanwhile the United States, a former hegemon, is unable to stop them as it is losing its political power and is “de-facto bankrupt,” William Engdahl, a political observer for New Eastern Outlook, told Radio Sputnik.

Slowly, but surely Russia, China and other emerging economies are beginning to reduce their dependency on the US dollar. Russia plans to trade oil using rubles by undermining the current US oil price monopoly.

"That would begin de-dollarizing the world oil trade in a significant way," Engdahl told Sputnik.

This move would be a dramatic blow to the economy of the United States and break the US political hegemony, Engdahl explained.

To make things even worse, the US economy is already struggling.

"The rest of the world is beginning to realize that the United States of America, the hegemon or the sole super power, whatever you want to call it, is de-facto bankrupt," the political expert told Sputnik.

It's not simply about the upcoming de-dollarization of the global oil trade, Engdahl explained, but due to the fact that the US economy has been severely hit on multiple fronts.

With US industries outsourced to other countries, unemployment shooting through the roof and trillions of dollars of debt, the US economy is in a terrible shape, Engdahl said.

JP Morgan analysts were less dramatic than Engdahl, but even they agreed that the chance of the US economy slowing down over the course of next few years increased by 75 percent. While the global economy is expected to grow by 2.6 percent in 2016, the US economy would likely slide into recession.

Read more: http://sputniknews.com/us/20160114/1033153676/us-economy-bankrupt-multipolar-world.html#ixzz3xFd8Vj9b

 

[TheNoob]

The title gave me a huge laugh.

 

[TruthSeeker]

PLAYING THE NUMBERS
01.14.1612:01 AM ET
Putin’s $450 Billion Wonderland
The Russian president’s description of the country’s economy seems to be disconnected from reality.
MOSCOW — This week, Russia slowly returned to its working routine after the 10-day New Year break. It was icy cold and snowy in Moscow, but warm and sunny in Sochi, the Black Sea resort, where President Vladimir Putin was surrounded with magnolias, palms, and cypress trees. Here in Moscow, you needed a thick overcoat if you dared a walk in the snow, while in Sochi a shirt and a light jacket were good enough. Truly, the Russian president lives in his own world, wholly different from most of Russia’s reality, and his world of the moment is subtropical.

Maybe the warm air and green leaves inspire optimism. Certainly President Putin began the New Year with a sunny analysis of the Russian economy for Bild, one of Germany’s leading newspapers. The president’s confident statements in Russian, with German phrases mixed in, described the country’s budget deficit as low, national reserves as rich, and the collapsing oil price as healthy for the Russian economy.

Russia has “more than $300 billion in gold reserves” in the Central Bank of Russia on top of $70 billion and $80 billion in the government reserve funds, Putin toldBild in Sochi. So, by Putin’s calculation, Russia still has about $450 billion in reserves.

Except that it doesn’t.

Moskovskij Komsomolets (MK), a newspaper read by nearly one-third of Muscovites, came out with a headline: “Putin made a $150 billion mistake evaluating Russian reserves.” The newspaper interviewed state experts and independent financial analysts, who sounded surprised, as the true information could be found on the government websites. Putin’s advisers must have misinformed the president, the paper suggested.

The true picture did not sound optimistic at all. Russia’s economy depends on oil like life depends on oxygen. It represents at least 15 percent of Russia’s GDP. On Wednesday, Russia’s leading economists gathered to hear Prime Minister Dmitriy Medvedev’s predictions for the state budget, which was calculated on the basis of $50 per barrel of Urals oil. But the price is more like $30 per a barrel.


Medvedev said that Russia had to prepare itself “for the worst scenario,” as they do that in other countries.

RBC reported that if the oil price drops to $24 per barrel, Russia’s deficit might increase to 7.5 percent of GDP.

“In fact, we are now in a much worse position than we were in 2008, when our reserves were actually over $600 billion and we had only 15 million people living in poverty,” one of the forum’s participants, Vladimir Ryzhkov, told The Daily Beast. “Now we have a bit over $300 billion in reserves and fast-growing poverty.”

Russia’s usable reserves are shrinking at a dangerous speed. The Central Bank of Russia said last year that Russian international reserves amounted to $364 billion in November. That means that the reserves fell by over $150 billion from $524 billion since Oct. 31, 2013.

In the years since Crimea was annexed and the Ukraine war began, the number of Russians below the poverty line has increased to 23 million. Former finance minister Alexei Kudrin said at the forum that the government had to begin cutting costs. “However, I do not know where to direct these cost cuts. We have already cut education and health costs,” Kudrin said, adding that the “Russian economy is in a vicious circle.”

As Ryzhkov put it, “If the oil price stays at $30 per barrel, we are going to spend about $100 billion of national reserves before the end of 2016; and if it does not grow next year, we’ll go through $200 billion of the Central Bank’s reserves with the ruble devaluing to over 100 to 1 dollar.”

“A real war against corruption would mean another revolution.”
Optimism about stability is Putin’s trademark, and something the president’s fans admire him for. “The president has to stay confident, surrounding himself with people capable of holding power and property (that is what makes a politician strong) and not with idealists,” said Sergei Markov, a member of the ruling United Russia party and the Public Chamber.

Maybe Russia’s economy could recover if state bureaucrats stopped stealing from the Russian budget? In 2014, Russia was 136th out of 175 countries in Transparency International’s global ranking of corruption. But the Kremlin’s loyalists immediately said the ranking was politicized, and that corruption was a non-official deal between authorities and local populations.

“Even if governors and other state officials are corrupt, we are not going to fight that, as a real war against corruption would mean another revolution, and that is what Russian society does not desire,” Markov told The Daily Beast.

Those who criticized the president’s point of view have been cast as provocateurs or liars or foreign agents, fighting against Russia in “the hybrid war” being waged against it at different levels by Western powers.
On Tuesday, Chechen leader Ramzan Kadyrov declared at a press conference in the Chechen capital of Grozny that Putin’s critics, allegedly hired by foreign secret services, were jumping all over themselves to oppose Putin. “Such people should be treated as enemies of the people, as betrayers. They should be put on trial,” Kadyrov said.

Every Russian knows that Stalin executed “enemies of the people,” so the words sounded life-threatening, especially after one of the high-profile critics of Putin’s politics, Boris Nemtsov, was assassinated outside the Kremlin’s wall last February.

“After Nemtsov’s murder, Kadyrov’s words sound like a direct threat,” said Ryzhkov. “He speaks as a classical dictator, Mao or Stalin. All dictators say the same thing, that opposition is a national threat inspired by foreign powers. But Russia is a democratic state, according to its constitution, and Kadyrov’s dictatorial messages are anti-constitutional.”

Democracy may be struggling, but it is still alive in Russia. Significantly, the Gaidar Economic Forum is named after one of the fathers of Russian democrat reforms, Yegor Gaidar. And the forum put the most pressing issues on its agenda, including the question of spreading political protests.

On the day of the forum President Putin told the government that Russia had to be ready for any developments in the commodities markets and equity markets, to “monitor this very carefully and have scenarios prepared for the Russian economy for any event.”

According to VTSIOM, a state-run pollster, 52 percent of Russians believe that the “hardest times” are ahead.

While Russia’s Economy Crumbles, Putin’s in Wonderland - The Daily Beast

 

[Providence]

De-dollarize to what exactly ?

You know it's easy to sit in your garage and type horse-crap all day but you words gotta make sense to the outside world.

Yuan has severe capital restrictions to make it a viable transaction tool and less said about rouble is better.

 

[oprih]

I'm so lucky to be born not american, I will not be part of country that will be a laughingstock of the world once it's economy collapse.

 

[Lonely Hermit]

Yes, Filipino lady boys are admired world wide.

He is a chinese false flagger used to go by id @oproh

 

[My-Analogous]

De-dollarize to what exactly ?

You know it's easy to sit in your garage and type horse-crap all day but you words gotta make sense to the outside world.

Yuan has severe capital restrictions to make it a viable transaction tool and less said about rouble is better.

Learn one terms called currency swaping. Goggle it and check how many countries did that in past five years

 

[Azeri440]

the little kids here don't seem to realize that the collapse of American economy = Global economic problems.

 

[Ankit Kumar]

World Rushes to De-Dollarize Oil Trade Before US Economy Crashes and Burns

Russia, China, India and other emerging powers are pushing for a multipolar world; meanwhile the United States, a former hegemon, is unable to stop them as it is losing its political power and is “de-facto bankrupt,” William Engdahl, a political observer for New Eastern Outlook, told Radio Sputnik.

Slowly, but surely Russia, China and other emerging economies are beginning to reduce their dependency on the US dollar. Russia plans to trade oil using rubles by undermining the current US oil price monopoly.

"That would begin de-dollarizing the world oil trade in a significant way," Engdahl told Sputnik.

This move would be a dramatic blow to the economy of the United States and break the US political hegemony, Engdahl explained.

To make things even worse, the US economy is already struggling.

"The rest of the world is beginning to realize that the United States of America, the hegemon or the sole super power, whatever you want to call it, is de-facto bankrupt," the political expert told Sputnik.

It's not simply about the upcoming de-dollarization of the global oil trade, Engdahl explained, but due to the fact that the US economy has been severely hit on multiple fronts.

With US industries outsourced to other countries, unemployment shooting through the roof and trillions of dollars of debt, the US economy is in a terrible shape, Engdahl said.

JP Morgan analysts were less dramatic than Engdahl, but even they agreed that the chance of the US economy slowing down over the course of next few years increased by 75 percent. While the global economy is expected to grow by 2.6 percent in 2016, the US economy would likely slide into recession.

Read more: http://sputniknews.com/us/20160114/1033153676/us-economy-bankrupt-multipolar-world.html#ixzz3xFd8Vj9b

India?
I looked at Google for the reason and found a result " Iran India to dump petrodollar " and trade in India rupee , now can someone explain how India's oil trade with Iran hurts America economically ?

 

[jhungary]

Learn one terms called currency swaping. Goggle it and check how many countries did that in past five years

Currency swapping is not related to Dollar-Dumping (the correct term)

Currency Swapping is done to make trade easier, however, to swap a currency, USD is still involved.

Unless two country have a pegging rate, otherwise those 2 currency cannot be trade directly as there are no rate to refer to. And if the two country does not have a pegging rate, then the currency exchange have to be dealt with by Currency A to USD and then USD to Currency B. And while doing so, the transfer time is B+3 which means any given transaction will hold in the form of USD for 3 business day, and the bank will hold the USD and gain 3 days worth of interest payment, in USD, before releasing it into Currency B. Currency swapping provide each nation the cheapest solution in debt consolidation and avoiding hedging by floating interest rate.

Currency Pegging is another system, where two country negotiate a rate (by buying or selling each other currency) to establish a "Pegged" rate instead of a floating rate, and any transaction will be done directly between the currency of 2 nation and USD will not be involved.

to dump dollar, the country trying to dump dollar have to sell off all debt or forex on USD on the market, the problem with dumping dollar is that it would be a fire sale of your own currency, where usually there are more USD in the market than any country's own currency, and if a country buying back their own currency and release USD into the market, then it will basically depreciate their own currency value. And unless that currency is strong enough compare to the USD, otherwise other country will keep buying USD and basically bury the currency which dumping USD.

Dumping USD is actually quite dumb move at this time, as USD is around 65% internationalize. Which the next international reserve have a market of 18% (Euro), Which mean if EU starting to dump USD, their currency have to be at least 4 times stronger than now to pull off and not getting bury as people will lost their trust on Euro and start buying whoever selling their USD. Because for every 100 unit of forex out In the market 65-68 unit are USD, and only 18 unit are Euro, and you can only sell what you have so for every 100 unit of currency sold, you will need 400 unit of forex (to raise the amount to 68 unit of euro) to trade the USD or to put it simply, Euro worth 4 times as much as USD to be able to pull of a sale. Otherwise no one will buy if you offer 18 euro for $68 USD

It would not worth mention all other international currency.

 

[randaam janmam]

India?
I looked at Google for the reason and found a result " Iran India to dump petrodollar " and trade in India rupee , now can someone explain how India's oil trade with Iran hurts America economically ?

It doesn't. That was a temporary measure adopted by India and Iran when Iran was under sanctions. It undermined USA's sanctions, but other than that it didn't (and wasn't intended to) hurt USA economically.

 

[Providence]

Currency swapping is not related to Dollar-Dumping (the correct term)

Currency Swapping is done to make trade easier, however, to swap a currency, USD is still involved.

Unless two country have a pegging rate, otherwise those 2 currency cannot be trade directly as there are no rate to refer to. And if the two country does not have a pegging rate, then the currency exchange have to be dealt with by Currency A to USD and then USD to Currency B. And while doing so, the transfer time is B+3 which means any given transaction will hold in the form of USD for 3 business day, and the bank will hold the USD and gain 3 days worth of interest payment, in USD, before releasing it into Currency B. Currency swapping provide each nation the cheapest solution in debt consolidation and avoiding hedging by floating interest rate.

Currency Pegging is another system, where two country negotiate a rate (by buying or selling each other currency) to establish a "Pegged" rate instead of a floating rate, and any transaction will be done directly between the currency of 2 nation and USD will not be involved.

to dump dollar, the country trying to dump dollar have to sell off all debt or forex on USD on the market, the problem with dumping dollar is that it would be a fire sale of your own currency, where usually there are more USD in the market than any country's own currency, and if a country buying back their own currency and release USD into the market, then it will basically depreciate their own currency value. And unless that currency is strong enough compare to the USD, otherwise other country will keep buying USD and basically bury the currency which dumping USD.

Dumping USD is actually quite dumb move at this time, as USD is around 65% internationalize. Which the next international reserve have a market of 18% (Euro), Which mean if EU starting to dump USD, their currency have to be at least 4 times stronger than now to pull off and not getting bury as people will lost their trust on Euro and start buying whoever selling their USD. Because for every 100 unit of forex out In the market 65-68 unit are USD, and only 18 unit are Euro, and you can only sell what you have so for every 100 unit of currency sold, you will need 400 unit of forex (to raise the amount to 68 unit of euro) to trade the USD or to put it simply, Euro worth 4 times as much as USD to be able to pull of a sale. Otherwise no one will buy if you offer 18 euro for $68 USD

It would not worth mention all other international currency.

The 15 year twats here don't realize how much stability USD gives to world economy. They think their country leaders would announce some "swap" and bam their country gonna start trading in their local currency from next day.

They drink the kool-aid and come here to bluster with no knowledge of global financial markets.

 

[Tshering22]

It doesn't. That was a temporary measure adopted by India and Iran when Iran was under sanctions. It undermined USA's sanctions, but other than that it didn't (and wasn't intended to) hurt USA economically.

If it becomes permanent which became so and we start substituting Saudis (as they are weakening) with Iran, Russia, Venezuela, Indonesia and Vietnam and use local currencies to import energy needs, then we will unintentionally be weakening the $$.

Not much familiar with the way currencies work but what fuels dollar's power is its usage. We import quite a lot of fuel and so do other emerging economies. If currencies are swapped and local ones are used, it will slowly hurt dollar real bad.

China is doing its dealings with Saudi in RMB and will switch soon. That, will be the beginning of it all.

 

[Providence]

If it becomes permanent which became so and we start substituting Saudis (as they are weakening) with Iran, Russia, Venezuela, Indonesia and Vietnam and use local currencies to import energy needs, then we will unintentionally be weakening the $$.

Not much familiar with the way currencies work but what fuels dollar's power is its usage. We import quite a lot of fuel and so do other emerging economies. If currencies are swapped and local ones are used, it will slowly hurt dollar real bad.

China is doing its dealings with Saudi in RMB and will switch soon. That, will be the beginning of it all.

What fuels the usage ? It's the deep financial markets and seamless convertibility to and from ANY currency.

 

[Tshering22]

What fuels the usage ? It's the deep financial markets and seamless convertibility to and from ANY currency.

I agree; but you must understand that this is built up on a pile of skeletons. Those skeletons which are too serious to be shaken off. The war economy like everything else, had a beginning and so must it end.

Neither India nor I in particular have anything against US or $$. It is just that in your effort to keep it floating, you are doing too much damage across the world.