What the Petro-yuan Might Mean for the U.S. Dol­lar

Trillions - - In this Is­sue -

The Petro-dol­lar

The U.S. dol­lar has long dom­i­nated the global econ­omy and has been the pri­mary re­serve cur­rency for most na­tions. And it has been the main cur­rency used in the nearly $2 tril­lion an­nual global oil & nat­u­ral gas mar­ket. That may all be about to change.

The value of the dol­lar is strongly tied to oil and the world econ­omy is strongly in­flu­enced by the price of oil.

The un­sus­tain­able level of Amer­ica's na­tional debt, its on­go­ing po­lit­i­cal in­sta­bil­ity and desta­bi­liz­ing mil­i­tary in­ter­ven­tions have com­pelled many coun­tries to seek an al­ter­na­tive to the dol­lar for trad­ing oil but un­til re­cently few have ac­tu­ally been will­ing to fol­low through. Those who have tried in the past have paid a heavy price.

Many claim that the United States launched its dev­as­tat­ing at­tack on Iraq not be­cause of non-ex­is­tent weapons of mass de­struc­tion but be­cause Sad­dam Hus­sein had started sell­ing oil in Eu­ros, not dol­lars. Libya was at­tacked shortly af­ter Ghadaffi made moves to in­tro­duce the gold di­nar and started en­cour­ag­ing African and Mus­lim na­tions to switch to the gold di­nar and trade oil in it and not the U.S. dol­lar.

One of the rea­sons that the United States con­tin­u­ally beats the war drums against Iran is its re­peated in­ten­tions to stop sell­ing oil and gas in dol­lars.

Not long af­ter Venezuela an­nounced that it would no longer sell oil in dol­lars, the U.S. sug­gested that a mil­i­tary in­va­sion might be a pos­si­bil­ity but it has yet to make any overt moves to­wards an in­va­sion. How­ever, it is us­ing covert tac­tics to desta­bi­lize the coun­try.

The U.S. is now con­cen­trat­ing its war ma­chin­ery in the west Pa­cific, sup­pos­edly to threaten North Korea but it may in re­al­ity be send­ing a warn­ing to China about its soon to be launched petro-yuan.

As the world's largest oil im­porter, China's de­ci­sion to start buy­ing oil in its own cur­rency could be a mas­sive game changer.

Photo © by Night­man 1965

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