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

[Providence]

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.

My goodness .. what have we done now to keep dollar afloat? And please don;t start with saddam's switching to gold backed currency theories and what not. Gold backed currency lacks full convertibility and such currency can never replace a USD even theoretically ..

 

[Major Shaitan Singh]

I want to know when will American economy collapse, I am hearing it since Cold War time that American economy will collapse and it will break in pieces etc etc....

 

[Spectre]

Dollar is a backbone of international commerce and I don't see that changing unless G-20 sans US start on a concentrated campaign to stop transactions in dollars and formulate an alternative alternate currency to trade in. This would be combined with various other long term measures like selling Dollar Debts, establishing alternative Bretton Wood style organizations, . Pricing the alternative currency reasonably vis-a-vis national currency and foremost mutual and blind trust and respect towards other G-20 Nations.

In short -near term it is more realistic that pigs would prop up wings and start flying.

What is possible is that more and more countries enter into bi-lateral barter mechanism or conduct bilateral trade in their own currencies but as long as you sell products internationally in an open market Dollar is unavoidable in most cases.

@jhungary has well highlighted why Euro and Yen won't work. Less said about Renminbi the better at this stage.

Tomorrow if any country/stock market is in doldrums - be it even US - effect known as flight to quality happens - institutions start buying up dollars/treasury bonds and selling other assets because of Dollar having maximum liquidity.

Regards

 

[TruthSeeker]

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.

Yes, and we Americans can hope that you do not come to the USA and have children here. Our gene pool is already under attack without the added stupidity of little Oprihes.

 

[dadeechi]

Dollar is a backbone of international commerce and I don't see that changing unless G-20 sans US start on a concentrated campaign to stop transactions in dollars and formulate an alternative alternate currency to trade in. This would be combined with various other long term measures like selling Dollar Debts, establishing alternative Bretton Wood style organizations, . Pricing the alternative currency reasonably vis-a-vis national currency and foremost mutual and blind trust and respect towards other G-20 Nations.

In short -near term it is more realistic that pigs would prop up wings and start flying.

What is possible is that more and more countries enter into bi-lateral barter mechanism or conduct bilateral trade in their own currencies but as long as you sell products internationally in an open market Dollar is unavoidable in most cases.

@jhungary has well highlighted why Euro and Yen won't work. Less said about Renminbi the better at this stage.

Tomorrow if any country/stock market is in doldrums - be it even US - effect known as flight to quality happens - institutions start buying up dollars/treasury bonds and selling other assets because of Dollar having maximum liquidity.

Regards

@jhungary @Spectre

1) In the short term, I see a trend where countries are engaged in not only currency swap agreements but also in barter projects so that there would close to net zero transfer

2) One of the corner stones of the current setup is formation of OPEC and denomination of all oil trade is Dollars. What if OPEC gets divided and the Russia and it's allies (Kazakhstan, Iran etc) start denominating Oil in a separate reserve currency like Bancor? This is where foundational institutions like SCO, AIIB, BRICS Bank and alternative payment systems come in handy

Bancor - Wikipedia, the free encyclopedia

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[[Bregs]]

Its too early to for a viable currency to replace US $ as of now as all europe, canada and some arab kingdoms, japan are solidly behind US

But Russia, china and India have started this game but its still in its infancy

 

[Providence]

@jhungary @Spectre

1) In the short term, I see a trend where countries are engaged in not only currency swap agreements but also in barter projects so that there would close to net zero transfer

2) One of the corner stones of the current setup is formation of OPEC and denomination of all oil trade is Dollars. What if OPEC gets divided and the Russia and it's allies (Kazakhstan, Iran etc) start denominating Oil in a separate reserve currency like Bancor? This is where foundational institutions like SCO, AIIB, BRICS Bank and alternative payment systems come in handy

Barter system is a total non-starter. Reason is not rocket science but something fundamental.

Consider a very simple scenario where you have 10 oranges. Now if you need rice, you gotta find a person who not only has rice but has oranges too.

If that person is not near your place, you gotta lug around your oranges from door to door

 

[dadeechi]

Its too early to for a viable currency to replace US $ as of now as all europe, canada and some arab kingdoms, japan are solidly behind US

But Russia, china and India have started this game but its still in its infancy

India's policy has always been to be non-aligned. So India is going to split it's reserves between both the opposing groups. Russia and china are the ones who are strongly pushing for this alternative.

 

[Spectre]

Barter system is a total non-starter. Reason is not rocket science but something fundamental.

Consider a very simple scenario where you have 10 oranges. Now if you need rice, you gotta find a person who not only has rice but has oranges too.

If that person is not near your place, you gotta lug around your oranges from door to door

Barter system cannot replace currency system - that is absolutely true. It is like using telegram when you have cell phones - meaning the advent of common transactional currency has made barter system redundant.

That said it does have it's uses in limited and controlled environment where access to common currency is restricted. It can even never be used effectively to neutralized USD on it's own though

 

[dadeechi]

Barter system is a total non-starter. Reason is not rocket science but something fundamental.

Consider a very simple scenario where you have 10 oranges. Now if you need rice, you gotta find a person who not only has rice but has oranges too.

If that person is not near your place, you gotta lug around your oranges from door to door

What if you need Oranges for rice? then you do not need a third party. Again Barter system would only be an interim solution to reduce the exchange of currency until a new alternative is agreed upon.

 

[RazorMC]

At this stage, the removal of USD as a global currency will bring more problems that we can hope to solve.

There is currently no alternative out there. But I still don't appreciate how the world economy is so dependent on one currency.

 

[Providence]

What if you need Oranges for rice? then you do not need a third party. Again Barter system would only be an interim solution to reduce the exchange of currency until a new alternative is agreed upon.

Oranges for rice ? And how are you gonna fix up the prices ( oranges per oz. of rice ) ?

At this stage, the removal of USD as a global currency will bring more problems that we can hope to solve.

There is currently no alternative out there. But I still don't appreciate how the world economy is so dependent on one currency.

Trust me .. the world is fucked up not because of one currency system but the east asian countries which runs huge trade surplus with US and prefers to park their reserves in USD only.

 

[RazorMC]

...
Trust me .. the world is fucked up not because of one currency system but the east asian countries which runs huge trade surplus with US and prefers to park their reserves in USD only.

You're referring esp to China?
Biggest USD reserves and biggest sovereign creditor to the US?

 

[dadeechi]

Oranges for rice ? And how are you gonna fix up the prices ( oranges per oz. of rice ) ?



Trust me .. the world is fucked up not because of one currency system but the east asian countries which runs huge trade surplus with US and prefers to park their reserves in USD only.

I am not blaming US at all. I am only stating what plans Russia/China have.

 

[anon45]

I want to know when will American economy collapse, I am hearing it since Cold War time that American economy will collapse and it will break in pieces etc etc....

Major people have been predicting the American collapse since 1776!

RealClearPolitics - Articles - Three Centuries of American Declinism