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Breaking: Petrodollar Cracks: Saudi Arabia Considers Accepting Yuan For Chinese Oil Sales

Economic reality: China needs imports of raw materials to keep the material basis of it's prosperity, manufacturing, running. So China will be forced to accept RMB payments and freezing RMB accounts means freezing itself out of resource supply chains. It is a sort of vulnerability, but creates trust.

US does not want even 0.1% vulnerability. They say they don't need to import. Ok. They have independent oil and food. Ok. Then all they really offer is paper money in exchange for everything. For them freezing accounts is costless except for the reputational hit.

Would you trust a bank that had a legal obligation to you (if they stole your money, you can sue them) or one without (if they stole your money too bad)
But China devalues its currency to make its exports cheaper. Unlike the other reserve currencies -- USD, Yen, Pound, Euro -- the Yuan is not a free-floating currency. In fact, the Yuan's value is pegged to USD. Strange, China wants the Yuan to supplant the USD but still pegs it to the dollar. China should make its currency free-floating and let the market determine the exchange rates.
 
But China devalues its currency to make its exports cheaper. Unlike the other reserve currencies -- USD, Yen, Pound, Euro -- the Yuan is not a free-floating currency. In fact, the Yuan's value is pegged to USD. Strange, China wants the Yuan to supplant the USD but still pegs it to the dollar. China should make its currency free-floating and let the market determine the exchange rates.

Yuan is already free floating and not pegged.

It literally has risen in value vs the USD in the past few days alone. This is easily verified by googling USD RMB exchange rate.

Rising in value =! peg. It is the dictionary definition of not being pegged.

RMB has appreciated for years and the exchange rate has fluctuated by almost 20% in the past 15 years. Again a fluctuation of value is the opposite of a peg.

I strongly suggest you learn what a currency peg actually is.
 
Yuan is already free floating and not pegged.

It literally has risen in value vs the USD in the past few days alone. This is easily verified by googling USD RMB exchange rate.

Rising in value =! peg. It is the dictionary definition of not being pegged.

RMB has appreciated for years and the exchange rate has fluctuated by almost 20% in the past 15 years. Again a fluctuation of value is the opposite of a peg.

I strongly suggest you learn what a currency peg actually is.

China is controlling its country to acru maximum benefit for national interests, the central bank only intervens when there is a sharp move in either direction, which is bad for business, otherwise the RMB is as free flowing as other currency
 
Yuan is already free floating and not pegged.

It literally has risen in value vs the USD in the past few days alone. This is easily verified by googling USD RMB exchange rate.

Rising in value =! peg. It is the dictionary definition of not being pegged.

RMB has appreciated for years and the exchange rate has fluctuated by almost 20% in the past 15 years. Again a fluctuation of value is the opposite of a peg.

I strongly suggest you learn what a currency peg actually is.
China is using a managed float, its not pegged, but it not 100%free floating, they can't exceed 5% change in a day I think.
 
But China devalues its currency to make its exports cheaper. Unlike the other reserve currencies -- USD, Yen, Pound, Euro -- the Yuan is not a free-floating currency. In fact, the Yuan's value is pegged to USD. Strange, China wants the Yuan to supplant the USD but still pegs it to the dollar. China should make its currency free-floating and let the market determine the exchange rates.
CNY is not linked to any currency, and the Chinese govt does not oppose the appreciation of CNY, it just hopes that CNY will not appreciate too fast.
The slow and stable appreciation of CNY is more in line with the interests of the world economy, and the rapid rise will bring unnecessary risks.

Tying the world economy to a single currency is dangerous and unstable. Therefore, we do not want to use CNY to replace the US dollar. The world currency should be diversified and allow multiple currencies to share risks.
 
China is using a managed float, its not pegged, but it not 100%free floating, they can't exceed 5% change in a day I think.

Which is what every developed country should do so that they don't have lira or rupee happen to them.
 
Another reason for Saudi to use Yuan is -- Asset in the west have proven to be unsafe. During Russia Ukraine War, West confiscate everything Russian owns.

Oil sheikh freak out.
 
The chinese lack experience and gamesmanship in hegemony building as they are to hesitant and isolations.. They need forward thinking advisors which MBS can bestow upon them

Chinese civilization has a history of 5000 years, of which more than 4700 years, China is a hegemonic empire. We are not short of experience.

But the Opium War made us feel the pain of being bullied by imperialism. We no longer pursue to become an empire. It's not that we have no experience, but that the Chinese people don't want to.

We are now a socialist country. We no longer pursue hegemony and imperialism. We oppose hegemony and imperialism. Now we pursue global economic integration, great global economic development and a community with a shared future for mankind, which will enable us to have a larger and richer market and enable our people to obtain higher income. This is better than being a world policeman. We don't envy USA. We envy the Nordic countries.
 
I heard that Saudi Arabia wants to buy J20. Maybe pay with RMB.
 
Yup.
We need industries in America back.
PS. I remember watching an interview of Ron Paul (father of Senator Rand Paul) some months ago. When Ron was asked why are we [Americans] giving so much money to China for manufacturing?? Ron wryly smiled and said: 'We give them paper and they give us real products back for that'.
Except now, they seem to be on the verge of being able to give their paper to get oil, and at that point more people will need to have their paper to get oil.

This map is outdated. Afghanistan almost certainly trades more with China then the US now, and therefore, if I’m not mistaken, every country east of 30’E longitude trades more with China then the US.
 
With due respect, you don't know what you are talking about.
You think I made joke? Iran is the most sanctioned country on earth however has friends, the EU supports the nuclear deal. Putin makes Russia to a friendless country. Russia has friend like Eritrea. Russia is more sanctioned than Iran, NK, Cuba and Venezuela combine. What a shame for Russia.
 
You think I made joke? Iran is sanctioned however has friends, the EU supports the nuclear deal. Putin makes Russia to a friendless country. Russia has friend like Eritrea. What a shame.

Vietnam is one of Russia biggest Friend. You can ask Viettel in Hoa Lac, or the Army.
 
Vietnam is one of Russia biggest Friend. You can ask Viettel in Hoa Lac, or the Army.
Yes we are friends however now everyone is disappointed. Vietnam can’t help. China can’t help either Russia exports to China is less than 10 percent of total volumes how will Putin keep Russia living standard?
50 percent of Russia government budget come from exports revenue. Simple math. I am afraid mass unemployment and poverty will become unavoidable.
 
Yes we are friends however now everyone is disappointed. Vietnam can’t help. China can’t help either Russia exports to China is less than 10 percent of total volumes how will Putin keep Russia living standard?
50 percent of Russia government budget come from exports revenue. Simple math. I am afraid mass unemployment and poverty will become unavoidable.


So long as China, world biggest industrial output nation is helping Russia, there is no way Russia will loss the war of attrition. It will be the West that will loss.

Which is the reason, West is asking China to join in the sanction. Wet dream.
 
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