China’s launch of ‘petro-yuan’ in two months sounds death knell for dollar’s dominance

25 Oct, 2017

China's launch of 'petro-yuan' in two months sounds death knell for dollar's dominance

One of the world’s top energy importers, China, is set to roll out a yuan-denominated oil contract as early as this year. Analysts call the plan, announced by Beijing in September, a huge move against the dollar’s global dominance.

The so-called petro-yuan is a “wake up call” for investors who haven’t paid attention to the Chinese plans, according to the head of Graticule Asset Management Asia Adam Levinson, as quoted by Bloomberg.

Earlier this year, the Chinese government announced plans to start a crude oil futures contract priced in yuan and convertible into gold. The contract will enable the country’s trading partners to pay with gold or to convert yuan into gold without the necessity to keep money in Chinese assets or turn it into US dollars.

The new benchmark will reportedly allow exporters, such as Russia, Iran or Venezuela to avoid US sanctions by trading oil in yuan.

The analyst said the new contract would be able to serve as a hedging tool for Chinese corporations, as well as support the government’s broader plans to extend the use of the national currency in trade settlement.

According to Levinson, Chinese companies might grow into anchor investors in Saudi Arabia’s initial public offering of its national oil giant, Saudi Aramco.

At the same time, some analysts are skeptical of China’s ambitious plan to create its own benchmark.

“Game changer it is not — at least not yet. But it is another indicator of the beginning of the glacial, and I emphasize the word glacial, decline of the dollar,” said Gal Luft, co-director of the Institute for the Analysis of Global Security, as quoted by CNBC.

The end of US dollar hegemony has been a consistent message from Russian President Vladimir Putin.

“Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulatory reforms and to overcome the excessive domination of the limited number of reserve currencies,” Putin said two months ago during the BRICs summit in Xiamen.

Source: https://www.rt.com/business/407704-china-oil-plans-yuan-contract/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

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US ‘Empire of Debt’ will go to war to stop emergence of petro-yuan – Max Keiser

26 Oct, 2017

US ‘Empire of Debt’ will go to war to stop emergence of petro-yuan – Max Keiser

© Thomas White / Reuters
The imminent introduction of oil trading in yuan is a very bold move by the Chinese, because the US will not give up the basis of its hegemony – the dollar as the world’s reserve currency – without a fight, Max Keiser, host of RT’s financial program ‘Keiser Report’ has said.

The Chinese plan to roll out a yuan-denominated oil contract before the end of this year is a very brave move, since countries who “tried to exit the oil-dollar matrix have met terrible ends,” Keiser pointed out.

“Saddam Hussein wanted to trade oil in Euros and he was killed, Muammar Gaddafi wanted to trade his energy in something other than the US dollar – he was killed,” Keiser said.

China, however, has the resolve and the resources to pull-off the de-dollarization, and besides, it’s backed by several major countries which are “resistant to America’s financial cartel,” namely Russia and Iran, Keiser said.

“Kudos to China for taking this project on and of course they are rumored to be a big buyer in the Aramco offering of their state oil facilities coming down the pike,” Keiser said, referring to the anticipated sales of shares in the Saudi Aramco state oil company.

“This makes sense, geopolitical sense, in terms you’ve got China and Russia and the Saudis looking to escape the US dollar, US dollar hegemony.”

Saudi Arabia was pushed to the de-dollarization crowd only recently by the US itself, which, last year, allowed survivors and relatives of the victims of the 9/11 attack to sue the kingdom over its alleged role in the terrorist acts, Keiser stated.

“There’s decently motivation for the Saudis. They want to float Aramco, they are deeply in debt and they are running out of cash. And they wanted to do an APO [alternative public offering] of Aramco either on London or American exchange, but they prevented from doing so from the legal actions of the 9/11 survivors, who rightly pointed at Saudis as the cause of 9/11,” Keiser noted.

Countries worldwide are tired of funding the America’s “military adventurism by being a party to the ‘Empire of Debt,’ as it’s known around the world – the US dollar,” and therefore, will likely join the de-dollarization movement, Keiser said.

The US financial sector and its military-industrial complex are unlikely to give up the dollar hegemony without a fight, though, as the dollar is both the basis and the main product of America. And the US will use its other favorite tool for it – war, Keiser believes.

“Maybe they will start a war between Japan and China, and maybe they will start a war with North Korea. America will do anything to keep the US dollar as the world’s reserve currency,” Keiser said.

“They will invade the countries, like Afghanistan, they will stop at nothing. Because this is the basis of the US empire. It’s not land-based, it’s not based on material goods, it’s based on rent-seeking. It’s based on landing dollars, getting out income and when countries can’t pay they dismantle the assets and take them over. We saw it in Latin America, South America, this is how America built its empire.”

https://www.rt.com/business/407789-us-petro-dollar-yuan/?utm_source=spotim&utm_medium=spotim_recirculation&spotim_referrer=recirculation

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