China will 'compel' Saudi Arabia to trade oil in yuan — and that's going to affect the US dollar

[jhungary]

on the contrary, usually when a country prints money too fast is when it grows too slowly. the recent Japanese prime minister wanted to print more money to jump start sluggish Japanese economy. Obama rev-ed up the money printing machine when recession started.

and, don't worry. once money is printed, it will find its way into the economy, often to the sectors preferred by government bureaucrats.

lol, you are over-simplifying the Quantum Easing method, it goes MORE THAN just printing money, in fact, QE would limited the printing by setting a goal for it and let it reintroduce back into full financial circle via financial project. Money print from QE is used to development and hence making opportunity, which mean, it contribute to urban development.

And QE did work, because Japan has recorded the first ever growth in a quarter in 2016 and US have been pushing thru 2.4% growth. Also, Quantum Easing happened LONG AFTER the gold standard has been abolished, regardless when you count after WW1 or during the 60s.

You need to read up more about this. Or are you intentionally misleading people? I am going to give you the benefit of the doubt for now.

 

[xyxmt]

You do understand how this "Purported" deal is done.

Saudi sell oil to China, China pay with RMB in a term that's worth 600-800 billions per year.

Now, 2 problems.

1.) China have a Trade Surplus with Saudi Arabia, yes, but not in the level of 600-800 billions, not even 100 billions not even 50 billions, so where can you supposedly Saudi can use the RMB that' left behind?

2.) How did China get that amount of RMB to pay for Oil purchased from Saudi Arabia?

If they are not ever going to convert to USD, then either Saudi will load up excessive RMB they cannot use or wanted, or China will have to give out excessive amount of RMB they cannot afford or wanted. Which mean unless Saudi started using RMB as official currency for EVERYTHING and dump the SAR, RMB will have a value of next to shit in a few year as they have accumulated enough and as you said, cannot convert it to USD.

And if China did not sell their USD reserve to convert for RMB, where do you suppose China to obtain multi billions nearly trillions worth of Yuan per year? Printing it like the US? It will basically collapse the whole Chinese economy.

If they do this, they need to convert the currency into USD, no matter what.

When Chinese currency become a de-facto 2nd reserved currency then they dont, even if it doesnt they can use most of it to import things from other countries, lets say rice from Pakistan or Cell phones form Korea

 

[Vassnti]

Misses one big point,China is pushing to be the world leader in electric and hybrid cars. If the succeed and they seem in most things the party sets its mind to I guess they won’t be needing all that much oil.

 

[nang2]

lol, you are over-simplifying the Quantum Easing method, it goes MORE THAN just printing money, in fact, QE would limited the printing by setting a goal for it and let it reintroduce back into full financial circle via financial project. Money print from QE is used to development and hence making opportunity, which mean, it contribute to urban development.

And QE did work, because Japan has recorded the first ever growth in a quarter in 2016 and US have been pushing thru 2.4% growth.

You need to read up more about this. Or are you intentionally misleading people? I am going to give you the benefit of the doubt for now.

first of all, it is quantitative easing, not quantum easing. second, if more money is created out of thin air and everyone gets it in proportion, then both price and income increase in the same proportion to cancel each other out. last, when more money is printed without underlying increase of productive capability, it will only make a visible difference when it benefits a part of economy first at the cost of the rest, because it forces the productive capability to be shifted from the rest of the economy, whose suffering often goes ignored.

 

[jhungary]

first of all, it is quantitative easing, not quantum easing. second, if more money is created out of thin air and everyone gets it in proportion, then both price and income increase in the same proportion to cancel each other out. last, when more money is printed without underlying increase of productive capability, it will only make a visible difference when it benefits a part of economy first at the cost of the rest, because it forces the productive capability to be shifted from the rest of the economy, whose suffering often goes ignored.

Umm, no......

Money did not just create out of thin air, there is an amount to create and amount to suspend, so, if the US print 30 billions this year, they will not print another 30 billions unless this current money is out of circulation. And it is not a price or income hike, it was dictated to goes into production not asset.

And all investment project is closely monitored, which mean they are not going to "Devoted into nothingness" like you said, there would be a productivity backing, and you see it as "Benefit parts of economy first with the cost of the rest" we see this as "benefit a part of economy in order to stimulate the rest" and in deed, it worked as such.

And finally, QE have nothing to do with Gold Standard being abolished.

When Chinese currency become a de-facto 2nd reserved currency then they dont, even if it doesnt they can use most of it to import things from other countries, lets say rice from Pakistan or Cell phones form Korea

To achieve that, RMB first need to go above Japanese Yen (which is at 4 %) then GBP (Which is at 5%) and then EURO (Which is at 16%) It take about 50 years for Euro to climb into second place, and 20 years for Japan, and you think How long it would take for China to overtake Euro? Even if they did, what is the impact when you get 20% on the side as the next dominant and USD would still be standing at 70 or even 80%? It does not do anything and it will not impact much on the market even eventually you can reach that level in some decades. In fact, by eliminating competition, the rise of RMB will force people to buy more USD because, well, unless there are changes in current RMB system, it wasn't that great to hold because it can be depreciated at any time.

And no, you cannot buy rice from Pakistan and Cell Phone from Korea. Because simply you are dumping RMB to other country, and would they be willing to trade you that with RMB is one thing, how are you going to establish a rate as to how much RMB to buy Pakistani Rice and How much RMB to buy a Samsung Mobile phone? When the price tag it was established in Rupee and Won and they pay their supplier in Rupee/Won/USD?

 

[Han Patriot]

first of all, it is quantitative easing, not quantum easing. second, if more money is created out of thin air and everyone gets it in proportion, then both price and income increase in the same proportion to cancel each other out. last, when more money is printed without underlying increase of productive capability, it will only make a visible difference when it benefits a part of economy first at the cost of the rest, because it forces the productive capability to be shifted from the rest of the economy, whose suffering often goes ignored.

Stop arguing with him, he has no understanding about fractional reserve system and he is expert in almost 'everything'. This guy will write grandfather's essay and overwhelm you with so much crap that you can't decipher what his point is.

 

[jhungary]

Stop arguing with him, he has no understanding about fractional reserve system and he is expert in almost 'everything'. This guy will write grandfather's essay and overwhelm you with so much crap that you can't decipher what his point is.

As if you know anything. LOL Aren't you the one saying controlling the road controlling the area? LOL, Jesus, Allah, Buddah, I almost pee my pant laughing, just exactly how dumb a person can be to come up with this conclusion? I have no idea, mostly because, you just break the scale.

Yeah, I am an expert of EVERYTHING, especially an expert of shit, I know one when I see one, and when I look at you............

But then you aren't even what I think you are right? Because you ain't saying anything, that mean you are way, WAY BELOW the level of being a tiny little piece of.

Or, you are just a 5 years old playing a big man, which you aren't, so........... let me quote the great Shawn Spencer and Burton Guster - Suck iiiiiiiitt.

 

[BABA AGHORI]

It wont happen all of sudden but gradually. other countries wont switch to Chinese currency over night but it might take a decade to do so...the point here is that the world will have option to trade in two currencies. when OPEC decided to only trade in USD there were no negatives for US Dollars but only the positive.

Over a decade or decade and a half, China and possibly India with other major powers will switch from fossil fuel-based power/transport to renewable/electric power. Petrodollar will die for sure.

 

[xyxmt]

Over a decade or decade and a half, China and possibly India with other major powers will switch from fossil fuel-based power/transport to renewable/electric power. Petrodollar will die for sure.

Everyone will, major or minor

 

[Han Patriot]

As if you know anything. LOL Aren't you the one saying controlling the road controlling the area? LOL, Jesus, Allah, Buddah, I almost pee my pant laughing, just exactly how dumb a person can be to come up with this conclusion? I have no idea, mostly because, you just break the scale.

Yeah, I am an expert of EVERYTHING, especially an expert of shit, I know one when I see one, and when I look at you............

But then you aren't even what I think you are right? Because you ain't saying anything, that mean you are way, WAY BELOW the level of being a tiny little piece of.

Or, you are just a 5 years old playing a big man, which you aren't, so........... let me quote the great Shawn Spencer and Burton Guster - Suck iiiiiiiitt.

Get my point now?

 

[jhungary]

Get my point now?

No, YOU GET MY POINT NOW?

I am a mirror, if you are an intellect and have the ability to hold a discussion in any sort of academic level, (I don't care if that is an University Debate or just talking amongst people) I will do that with you.

However, if you talk shit and go play like a 5 years old, I can do that too, and I am more than happy and joke about it, because the joke is on you.

And you, are not the one in the first category.

There is a reason why I am "Above The Law" as you said (ALTHOUGH I NEVER CLAIM THAT, it was your word) and moderation usually take my side of the story rather than yours, and the reason why I have 306 Positive Rating with your 1 and -1. If you don't get the idea now, you probably will not have a bright future in this forum.

But then, I don't think being you will know the meaning of discussion. When you talk like a 5 years old boy just to score brownie point with your mate, you will always stayed the level of being an attention whore and the kind of people saying ""Mummy, Mummy, Watch me dive into the pool" but you never did. You seek attention, I seek knowledge, and that is the fundamental different between you and me. You can of course continue on and go do something like that, but well, if you do so, YOU WILL ALWYAS LOSE AN ARGUMENT, because you never start, all you did is "Come look at me, I am insulting this guy, I am a man now" The more you do this, the more it show how you are immature. In the end, people see you is nothing big a giant joke.

 

[Han Patriot]

No, YOU GET MY POINT NOW?

I am a mirror, if you are an intellect and have the ability to hold a discussion in any sort of academic level, (I don't care if that is an University Debate or just talking amongst people) I will do that with you.

However, if you talk shit and go play like a 5 years old, I can do that too, and I am more than happy and joke about it, because the joke is on you.

And you, are not the one in the first category.

There is a reason why I am "Above The Law" as you said (ALTHOUGH I NEVER CLAIM THAT, it was your word) and moderation usually take my side of the story rather than yours, and the reason why I have 306 Positive Rating with your 1 and -1. If you don't get the idea now, you probably will not have a bright future in this forum.

But then, I don't think being you will know the meaning of discussion. When you talk like a 5 years old boy just to score brownie point with your mate, you will always stayed the level of being an attention whore and the kind of people saying ""Mummy, Mummy, Watch me dive into the pool" but you never did. You seek attention, I seek knowledge, and that is the fundamental different between you and me. You can of course continue on and go do something like that, but well, if you do so, YOU WILL ALWYAS LOSE AN ARGUMENT, because you never start, all you did is "Come look at me, I am insulting this guy, I am a man now" The more you do this, the more it show how you are immature. In the end, people see you is nothing big a giant joke.

I rest my case.

 

[jhungary]

I rest my case.

You don't have a case. All you do is moaning and then put some unrelated emoji at the end.

 

[RoadRunner401]

Petrodollar agreement was concluded by President Nixon in 1973.

The essence of the deal was that the U.S. would agree to military sales and defense of Saudi Arabia in return for all oil trade being denominated in U.S. dollars.

fateful to the petrodollar system has been the policy of zero interest rate policy and “quantitative easing” pursued so unrestrainedly since 2008. Effectively, energy producers saw that the U.S. economy had now become so dependent on low interest rates that it could never again manage to keep oil prices steady relative to U.S. treasuries without blowing up the global financial system.


A profound transformation of the global monetary system is underway. It is being driven by a perfect storm: the need for Russia and Iran to escape Western sanctions, the low interest rate policy of the U.S. Federal Reserve to keep the American economy afloat and the increasing demand for Middle East oil by China.

The implications of this transformation are immense for U.S. policy in the Middle East which, for 50 years, has been founded on a partnership with Saudi Arabia.

Well, both China and Russia have recently been big buyers of physical gold. Russia’s present gold reserves would back 27% of the narrow rouble money supply. That is a high ratio — far in excess of any other major country, and also in excess of the U.S. Fed’s original stipulated gold coverage minimum. Moreover, Russia is a large net exporter of goods and energy, notwithstanding sanctions. So Russia’s gold reserves, by implication, are likely to continue to grow, rather than decline.

In the longer term, holding roubles or yuan may allow producers to escape the damaging inflationary effects of a dollar system now dependent for its stability on low interest rates and monetary expansion.

These prospective changes are still speculative, but are potentially highly significant. The petrodollar has lasted for over 41 years, and has been the driving force behind America’s economic, political and military power. It would be ironic, indeed, were the tensions with Russia inadvertently to become the driver of America finally losing its petrodollar card.

 

[VCheng]

Petrodollar agreement was concluded by President Nixon in 1973.

Incorrect.

The "petrodollar" was created on 14 February 1945 as part of the Quincy Agreement.