ZH: Another Blow To The Petrodollar: India & The UAE Complete First Oil Sale In Rupees
This was always about the PetroDollar. https://t.co/1LDT9z4qyG
— Digital Asset Investor.XRP (@digitalassetbuy) August 12, 2023
ZeroHedge reported the following:
Another Blow To The Petrodollar: India & The UAE Complete First Oil Sale In Rupees
August 16, 2023
In another blow to dollar dominance, India and the United Arab Emirates settled an oil trade without converting local currencies to dollars for the first time on Monday, as India’s top refiner made a payment for oil in rupees.
Indian Oil Corp. bought a million barrels of oil from Abu Dhabi National Oil Company in a dollar-free transaction.
The oil sale was the first after the two countries entered a Memorandum of Understanding (MoU) in July. The deal established the Local Currency Settlement (LCS) system, facilitated by the Reserve Bank of India and the Central Bank of the United Arab Emirates. The system allows the two countries to engage in bilateral trade using the rupee and dirham. According to a statement by the Reserve Bank of India, the agreement will facilitate “seamless cross-border transactions and payments, and foster greater economic cooperation.”
The first test of the LCS involved the sale of 25 kg of gold from a UAE gold exporter to a buyer in India at about 128.4 million rupees ($1.54 million).
According to WIONews in India, the LCS system will reduce costs and speed up transactions between the two countries.
Additionally, reliance on national currencies is anticipated to bolster economic resilience and strengthen bilateral relations. Moreover, any surplus balances in the local currencies can be invested in various local assets, including corporate bonds, government securities, and equity markets.”
India has also purchased oil from Russia using non-dollar currencies.
India ranks as the third-largest oil importer in the world.
If the trend of dollarless transactions expands to other countries, the minimization of the dollar in the global oil trade would be bad news for the United States.
As it stands, the majority of global oil sales are priced in dollars. This ensures a constant demand for the greenback since every country needs dollars to buy oil. This helps support the US government’s “borrow and spend” policies, along with its massive deficits. As long as the world needs dollars for oil, it guarantees demand for greenbacks. That means the Federal Reserve can keep printing dollars to monetize the debt.
ZeroHedge explained how the process works.
One of the core staples of the past 40 years, and an anchor propping up the dollar’s reserve status, was a global financial system based on the petrodollar – this was a world in which oil producers would sell their product to the US (and the rest of the world) for dollars, which they would then recycle the proceeds in dollar-denominated assets and while investing in dollar-denominated markets, explicitly prop up the USD as the world reserve currency, and in the process backstop the standing of the US as the world’s undisputed financial superpower.”
Simply put, de-dollarization would drastically diminish US economic power and wreck the country’s economy. https://www.zerohedge.com/geopolitical/another-blow-petrodollar-india-uae-complete-first-oil-sale-rupees
Does the government of the USA still care about what has been called the “petrodollar’?
Yes.
Notice something that the government of the USA has been doing:
August 10, 2023
The United States is negotiating behind the scenes with Saudi Arabia, pressuring the country to keep selling its oil in dollars.
Washington is concerned that Riyadh may price its crude in other currencies, particularly China’s renminbi.
Saudi Arabia is one of the world’s top three oil producers. Since the 1970s, Riyadh has agreed to sell its crude in dollars, helping maintain the greenback’s hegemonic status as the global reserve currency. …
The petrodollar system has been a key pillar holding up the hegemony of the US currency.
The fact that countries that import oil need dollars to pay for it ensures steady demand for Washington’s currency around the world.
This stabilizes the dollar, helping to finance the massive current account deficit the United States has maintained for decades.
When most countries have a consistent trade deficit, their national currency depreciates against the currency they use to pay for imports. As the local currency weakens, this makes imports more expensive and exports cheaper, encouraging the country to balance its trade.
However, the United States has long been able to maintain a gargantuan trade deficit with the rest of the world because there is so much demand for its currency.
The petrodollar system is one important reason for this high demand for dollars …
Saudi Arabia’s finance minister confirmed for the first time in public this January that Riyadh is indeed considering selling oil in other currencies.
However, although there has been a lot of speculation about this in the financial press, the Saudi government has not publicly announced any plans to price its crude in yuan or any other currency. https://geopoliticaleconomy.com/2023/08/10/us-saudi-arabia-sell-oil-dollars-chinese-yuan/
Well, despite pressure on other nations, the US is in the process of losing its unique “petrodollar” role.
Consider what the Saudis have just been doing:
August 16, 2023
Saudi Arabia’s stockpile of US Treasuries fell to the lowest level in more than six years, …
The Gulf country in June sold more than $3 billion in US government debt, offloading the securities for a third consecutive month to bring its holdings to $108.1 billion, according to Treasury Department data. The neighboring United Arab Emirates sold nearly $4 billion.
The Arab Gulf region’s petrostates are seeking out new avenues for investing to get higher returns in a world where a backlash is building against the hegemony of the US dollar. For Saudi Arabia, whose holdings of Treasuries are down over 41% since early 2020, …
Saudi Arabia is the world’s largest oil exporter and a pillar of a petrodollar system established in the 1970s that relies on pricing crude exports in the US currency. While maintaining a peg to the dollar for decades, it’s now also seeking to strengthen its relations with crucial trade partners including China as part of an effort to diversify the economy away from energy. https://finance.yahoo.com/news/saudi-hoard-us-treasuries-six-071928880.html
Back in 2017, I reported the following:
Both Europe and China want to dominate the world. Currently, on certain matters, they are working together and with other countries, to dethrone the dominance of the USA and its Anglo-Saxon descended allies, like the UK., notice also the following:
China is currently modifying the terms of its oil trade with Saudi Arabia. Specifically, China is working on a deal to pay for Saudi oil using Chinese yuan. This effort poses a direct threat to the security of the dollar.
If this China-Saudi deal happens — yuan for oil — it’s another step closer to the grave for the petrodollar, which has dominated global finance since 1974. You can revisit Jim Rickards article about the Assault on the Dollar, here.
To recap, the petrodollar is weakening because the dollar is losing power as the world’s reserve currency. This is similar to the way pounds sterling gradually fell out of favor during the decline of the British Empire. The decline may take a long time, but what we’re seeing today is another step in the death march of the dollar.
Since 1974, Saudi has accepted payment for almost all of its oil exports — to all countries — in dollars. This is due to an agreement between Saudi and the U.S., dating back to the days of President Nixon.
Beginning about 15 years ago, China ceased being self-sufficient in oil, and began buying Saudi oil. As per all Saudi customers, China had to pay in dollars. Even today, China still pays for Saudi oil in U.S. dollars and not yuan, which perturbs China’s leaders.
Since 2010, China’s total oil imports have nearly doubled. According to Bloomberg News, China has surpassed the U.S. as the world’s largest oil importing nation. …
If Saudi begins accepting yuan for oil, all bets are off on the petrodollar. Yuan-for-oil will entirely change the monetary dynamics of global energy flows. I expect the U.S. dollar to weaken severely when that news breaks.
Much of this oil-for-yuan news is public information. Yet, for some strange reason, there’s a form of blindness within western policymaking and media circles concerning the implications of yuan-for-oil. The idea is so “off-the-wall” that many policy leaders simply ignore it. http://www.zerohedge.com/news/2017-06-01/chinas-next-step-destroy-dollar
What is the petrodollar?
Essentially, it is the fact that although the US dollar is no longer backed by gold, since most oil is priced in US dollars, that gives the US dollar a backing in through a needed commodity, hence always insuring that the US dollar will have value. So it is sometimes called a petrodollar–which is broader than the term’s original intent. …
The existence of the ‘petrodollar’ seems to have helped the USA be in a position to increase its debt and that will not end well (cf. Habakkuk 2:2-8; Daniel 11:39).
As far as China goes, it wants more world influence and ultimately domination (watch Is China paving roads to Armageddon?), but the Bible shows that while China will be prosperous for a time, it will be a power from Europe that will essentially dominate the world for the last 3 1/2 years before Jesus returns. (Thiel B. China trying to benefit from US withdraw of Paris accord, while also working to eliminate the ‘petrodollar’. COGwriter, June 2, 2017)
The moves by the Saudis and the Emirates to dump more of their USA Treasury holdings, Chinese moves, plus the deal between India and the United Arab Emirates are causing more cracks in the power of the USA to keep its petrodollar policy in place.
The US dollar will one day be worth no more than the scrap or novelty value of its cotton-paper stock.
Are you paying attention to what is going on in the world?
This will not end well for the USA nor its British-descended allies.
Probably within the next decade.
Some items of possibly related interest may include:
The End of US Dollar Dominance Is the USA losing its economic status? What about the petro-gold-yuan? A related video is also available: US Dollar being challenged by Gold-Petro-Yuan.
Does God Have a 6,000 Year Plan? What Year Does the 6,000 Years End? Was a 6000 year time allowed for humans to rule followed by a literal thousand year reign of Christ on Earth taught by the early Christians? Does God have 7,000 year plan? What year may the six thousand years of human rule end? When will Jesus return? 2031 or ? There is also a video titled 6000 Years: When will God’s Kingdom Come? Here is a link to the article in Spanish: ¿Tiene Dios un plan de 6,000 años?
Might the U.S.A. Be Gone by 2028? Could the USA be gone by the end of 2028 or earlier? There is a tradition attributed to the Hebrew prophet Elijah that humanity had 6,000 years to live before being replaced by God’s Kingdom. There are scriptures, writings in the Talmud, early Christian teachings that support this. Also, even certain Hindu writings support it. Here is a link to a related video: Is the USA prophesied to be destroyed by 2028? In Spanish: Seran los Estados Unidos Destruidos en el 2028?
When Will the Great Tribulation Begin? 2023, 2024, or 2025? Can the Great Tribulation begin today? What happens before the Great Tribulation in the “beginning of sorrows”? What happens in the Great Tribulation and the Day of the Lord? Is this the time of the Gentiles? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord? Who are the 144,000? Here is a version of the article in the Spanish language: ¿Puede la Gran Tribulación comenzar en el 2020 o 2021? ¿Es el Tiempo de los Gentiles? A related video is: Great Tribulation: 2026 or 2027? A shorter video is: Can the Great Tribulation start in 2022 or 2023? Notice also: Can Jesus return in 2023 or 2024? Here is a video in the Spanish language: Es El 2021 el año de La Gran Tribulación o el Grande Reseteo Financiero.
Is a Great Reset Coming? Klaus Schwab of the World Economic Forum has proposed a societal change that has been basically endorsed by the Vatican and many world leaders. Does the Bible prophesy a major reset? Here is a link to a related video: Will there be a “Great Reset”?
Lost Tribes and Prophecies: What will happen to Australia, the British Isles, Canada, Europe, New Zealand and the United States of America? Where did those people come from? Can you totally rely on DNA? What about other peoples? Do you really know what will happen to Europe and the English-speaking peoples? What about Africa, Asia, South America, and the Islands? This free online book provides scriptural, scientific, historical references, and commentary to address those matters. Here are links to related sermons: Lost tribes, the Bible, and DNA; Lost tribes, prophecies, and identifications; 11 Tribes, 144,000, and Multitudes; Israel, Jeremiah, Tea Tephi, and British Royalty; Gentile European Beast; Royal Succession, Samaria, and Prophecies; Asia, Islands, Latin America, Africa, and Armageddon; When Will the End of the Age Come?; Rise of the Prophesied King of the North; Christian Persecution from the Beast; WWIII and the Coming New World Order; and Woes, WWIV, and the Good News of the Kingdom of God.
 |
Tweet |
|