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