Posted on 10/25/2013 11:57:19 AM PDT by Rusty0604
The number one American export is U.S. dollars. It is paper currency that is backed up by absolutely nothing, but the rest of the world has been using it to trade with one another and so there is tremendous global demand for our dollars. The linchpin of this system is the petrodollar. For decades, if you have wanted to buy oil virtually anywhere in the world you have had to do so with U.S. dollars. But if one of the biggest oil exporters on the planet, such as Saudi Arabia, decided to start accepting other currencies as payment for oil, the petrodollar monopoly would disintegrate very rapidly. For years, everyone assumed that nothing like that would happen any time soon, but now Saudi officials are warning of a "major shift" in relations with the United States. In fact, the Saudis are so upset at the Obama administration that "all options" are reportedly "on the table". If it gets to the point where the Saudis decide to make a major move away from the petrodollar monopoly, it will be absolutely catastrophic for the U.S. economy.
And without a doubt, the day is rapidly approaching when the petrodollar monopoly will end.
Today, Russia is the number one exporter of oil in the world.
China is now the number one importer of oil in the world, and at this point they are actually importing more oil from Saudi Arabia than the United States is.
So why should Russia, China and virtually everyone else continue to be forced to use U.S. dollars to trade oil?
That is a very good question.
In fact, China has been making a whole lot of noise recently about the fact that it is time to start becoming less dependent on the U.S. dollar.
(Excerpt) Read more at theeconomiccollapseblog.com ...
Time for us to become less dependent on everybody including cheap Chinese crap.
We have more than enough oil and gas assets to cut these mouth breathers off. Open up Alaska, build Keystone and more, drill, drill, drill.
just not so long ago
our wonderful and so loyal (NOT) Saudi friends
were threatening to dump the dollar as the
value standard for oil prices, and
with thinkin that the Middle East oil
has an even bigger stranglehold on world
oil supplies
oh how quickly the mighty fall
“In fact, China has been making a whole lot of noise recently about the fact that it is time to start becoming less dependent on the U.S. dollar.”
good, let them
and we can get the Fed to quit delivering all
the fiat-money-inflation-generating cheap
dollars used to buy all China’s exports
I agree. And although Saudi says the reason for the rift is Iran, I also believe it’s the fact that we are becoming less dependent on them for oil.
The EPA will gladly outlaw our energy production to prevent (delay) the dollar collapse.
Can’t wait for the day when we can finally tell the Saudis to go F themselves.
pump our own oil and make our own stuff should be something US policy should encourage, not punish
Aren’t you concerned about environmental damage?
Wouldn’t you rather see America covered in solar panels and wind turbines as far as the eye can see?
An unbridgable chasm between America and Saudi (and all of Islam) should have been established on 9/11/2001.
Only Cape Cod and Malibu.
New at McDonald's: Windmill Eagle McNuggets.
The collapse of the petrodollar is the very definition of the shiite hitting the fan. Should it happen, the world as you know it will be over. It would have to lead a suspension of constitutional law aka: martial law. Oh, and try to guess who it would leave sitting in the oval office to guide us through the greatest financial crisis that has ever befell America.
When Obama was speaking about the debt ceiling he was saying that the dollar is the reserve currency for the world and it will continue to be. I was thinking that if I were a leader in another country, I would do anything to keep from being forced to use the dollar and lend to the U.S. when they just keep printing and borrowing money in order to spend it on welfare for its citizens that are too lazy to work (and espionage).
Obama is trying to keep a lid on it.
The minute this happens, there will be major economic chaos and dislocations in the world economy.
The US is still the consumer of last resort for export driven nations and we prop up a lot of countries economies world wide.
The European socialist governments with the possible exception of Sweden, which lives off it’s natural resources,could not sustain their welfare systems exclusive of massive exports to the US because their stagnant economies cannot support their massive welfare programs with their internal economic activity.
China depends upon the fact that it’s currency is pegged to the dollar at 1992 exchange rates when China was a Third World backwater. If China had to live in a world where it’s currency assumed a strength commensurate with it’s economic power, its products would cost double what they do now which would kill it’s export trade world wide, and especially in the United States.
China and Australia have signed a currency swap agreement in a bid to promote bilateral trade and investment.
It will allow for the exchange of local currencies between their central banks, worth up to 30bn Australian dollars ($31bn; £20bn) over three years.
The deal is expected to reduce cost for businesses, as they will be able to settle trade terms in local currency.
http://www.bbc.co.uk/news/business-17471095
The Australian dollar is set to become only the third currency to trade directly with the Chinese yuan — a move that will help internationalize China’s currency and smooth transactions between the major trading partners.
The yuan, also called the renminbi, already trades directly with the U.S. dollar and the Japanese yen.
China is pushing to internationalize the yuan, and the currency is being used to conduct a growing number of transactions on international markets as Beijing loosens its grip.
Critics have long accused China of keeping its currency artificially low, making its exports cheaper and more competitive against foreign players.
But the currency has been allowed to appreciate recently, easing periodic tensions over the issue.
http://money.cnn.com/2013/04/08/investing/china-australia-currency/index.html
Say what you will, but remember, Saudi Arabia has been a close “safe” operating COMMZ for our operations in the middle east ever since the thirties. Our involvement in that part of the world is not over. Where would you prefer to stage in that theater if not in the kingdom? It takes policies as screwed up as Obama’s and Kerry’s (who is rumored to have served in Vietnam) to PO the royal family to this degree. The US is on a positive hydrocarbon course thanks to fracking. That does not mean we should pee down the legs of countries whose vital National Interests coincide with ours, to the point of driving them away. I am not proposing that we should kiss anyone’s rear, but neither should we go out of our way to put them in a negative position vis a vis the rest of the world. You want Russians in Saudi Arabia in years to come like they were in Afghanistan? You would propose military action against Iran without support bases in Saudi Arabia? It would feel good to tell them off. Not so wise I’d say.
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