Russia Just Pulled Itself Out Of The Petrodollar

Zerohedge ^ | 1-14-2015 | Durden

[tcrlaf]

Back in November, before most grasped just how serious the collapse in crude was (and would become, as well as its massive implications), we wrote "How The Petrodollar Quietly Died, And Nobody Noticed", because for the first time in almost two decades, energy-exporting countries would pull their "petrodollars" out of world markets in 2015.

This empirical death of Petrodollar followed years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling.

We added that in 2014 "the oil producers will effectively import capital amounting to $7.6 billion. By comparison, they exported $60 billion in 2013 and $248 billion in 2012, according to the following graphic based on BNP Paribas calculations."

[JoeFromSidney]

Note the term "recycled petrodollars" in the article. That term goes back to the era after the oil embargo. We bought oil from Saudi Arabia (among other places), and paid in dollars. What could they do with their dollars? Buy things from us, including stocks and bonds. This bringing the dollars back home was referred to as "recycling." Remember, back then "recycling" was a very good word. Almost sacred. Calling it "recycling" disguised the fact that we were selling our country, piece by piece, in exchange for oil. We were literally burning up our country.

Always watch the terms being used. Most of the time they are "good sounding" terms used to disguise something evil.

As an aside, one of the few advantages of getting old is that you don't have to read the "minutes of the previous meeting." You were there and remember it. It's harder to put something over on someone who can answer "yes" to "Vas you dere, Charlie?"

[GeronL]

How is that new reserve currency coming along, Vladimir?

[odds]

“Bad for everyone but those that keep their wealth in precious metals.” — spot on. Paper (any kind) can easily become worthless. It really isn’t “real money”.

[odds]

Agreed. China will only think of itself. At present they’re laughing & in control.

[Enlightened1]

Yep and they are trading with China our so called friends.

Keep in mind both economies are Capitalist even though Socially they are both communist.

I know they are saying this is going to be doom and gloom for Russia, but I can't see how?

If Russia was the old Soviet Union Communist economy or like Venezuela Socialist economy. Then I could see it hurting them.

However, Russia has a 13% flat tax only. Ever since they implemented it. They have a surplus of tax money.

Now who I think this will hurt is us. It will hurt our Shell Oil industry.

Although the cost of doing business world wide will be cheaper which is really good for everyone.

[Stentor]

Which pretty much means that anything coming from ZeroHedge is BS.

I like "Truth". That's why I always get my information from the Bureau of Labor Statistics and Business Insider. /S

[Grzegorz 246]

When Tyler durden (my ass) is speaking, it is “Tinfoiled Again” without any doubt.

Now let's stock up some fuel (with hats on) because peak oil is just behind the corner...

[Grzegorz 246]

Now what’s wrong with BLS ? Perhaps some people are just idiots, who have no clue how to read statistics ?

[Stentor]

You’re right. Some people are idiots.

[SunkenCiv]

I was peeking at some hydrocarbons just today, nice, and a little weird, to fill up for $25.

[Zeneta]

The Fed will nuke the Dollar when they meet in two weeks, by making the very necessary upward tweak in interest rates.

If the FED raises rates it will cause the value of the dollar to INCREASE !!!!