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Page added on September 22, 2012
China in closed door negotiations to purchase Mexican crude oil without using US dollars
Mexican crude oil to be sold to China without using the US dollar as its trading currency
Sources inside the Mexican government refuse to confirm that the Mexico government has been in secret negotiations with China over possible crude oil sales to China without using the US dollar.
China officials claim meetings held with the Mexican government and Petróleos Mexicanos (or Pemex) are for investment and economic growth inside Mexico. Crude oil purchases fall under this heading however officials on both sides in the past have stopped short of publicly discussing crude oil or any talks related to any special agreements relating to crude oil purchases.
Sources inside Mexico claim this week that China has in fact brokered a secret deal with Pemex to purchase crude oil using currency means other than the US Dollar. The details of this agreement are still unknown at this time but China is expected to make a public announcement within the next few days.
Over the past ten years with new trade agreements China has invested billions of dollars inside Mexico. China has helped the Mexican government create jobs and has financially supported investments in the privatization of ports and infrastructure throughout Mexico. Mexico continues to privatize large sectors of its economy and China is line to benefit from additional investments inside Mexico.
Since the 2009 global economic crisis Mexico’s central bank has been quietly purchasing large quantities of gold. Mexico Central bank buys 100 tonnes of gold
http://www.ft.com/cms/s/0/cbc02e10-7637-11e0-b4f7-00144feabdc0.html#axzz27287HHy0
Then again in May 2012 Mexico Central Bank boost gold holdings yet again and some of this gold purchased by Mexico’s Central bank has come from China.
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=152096&sn=Detail
These large gold purchases by the Mexican Central bank and the successful restriction of the US dollar from use inside Mexico (as already reported) along with a closer relationship with China and speculation of secret petroleum deals that do not include using the US dollar are sure to raise new concerns in global markets as this story continues to unfold. These strategic moves on the part of Mexico’s Government and Mexico’s Central bank are said to be protective measures to shield Mexico from what it sees as the imminent and unavoidable devaluation of the US dollar. (In layman’s terms the collapse of the US Dollar)
Global finical markets are very concerned with trading oil in other currencies other than the US Dollar as doing so is actually helping to rapidly destabilize the US dollar even further. Russia and China announced this week that they have also entered into an agreement between the two countries to trade crude oil using their own currencies and not the US dollar.
Many experts have warned such actions of replacing the US dollar as the trade currency for crude oil in any country will cause the US immediate, sever, and devastating consequences that could lead to the US Dollar losing its value almost overnight. Factoring in that Mexico is one of the largest exporters of crude oil to the USA this news is especially troubling for the US Dollar.
The US government has voiced these same concerns but with the continued and uncontrollable escalating US debt the United Sates is no longer in a position to prevent other countries from taking these preemptive measures to protect themselves against the devaluation of the US Dollar which is excepted to occur with this next round of quantitative easing (also referred to as QE3) which coincidentally was also announced was underway as of this week.
As more countries around the world openly admit they are losing confidence in the US dollar there is no doubt that the US dollar is in grave peril of imminent and total collapse. In a news conference last week before federal policy makers the Federal Reserve Chairman Ben Bernanke said; “I don’t think our tools are strong enough to offset the effects of a major fiscal shock, so we’d have to think about what to do in that contingency”
11 Comments on "China in closed door negotiations to purchase Mexican crude oil without using US dollars"
Ken Nohe on Sat, 22nd Sep 2012 12:36 pm
This, if true, is a news indeed. Step by step, then suddenly. That’s probably how it will take place. Then, the post 2nd world war world will be over for good and we will enter the 21 century. 2013? Likely.
Arthur on Sat, 22nd Sep 2012 1:47 pm
“Then, the post 2nd world war world will be over for good and we will enter the 21 century.”
Exactly.
If true, and why not, Mexico is chosing the side of China rather than the US. This is all very logical as Mexico is on the verge on enormous territorial expansion at the cost of the US. Here are the facts ‘on the ground’:
http://constitutionalvoices.org/bloggers/freedomblogger2/wp-content/uploads/2010/02/Map-Majority-Minority-Milestone-in-South.bmp
Mexico knows that both China and Russia will be very willing in recognizing a La Raza provisional government in the South-West of the still USA. That split will come on the moment that the US will be embroiled in a major clash with SCO, threatening to morph in a world war. The Latino’s, with zero affinity with the world revolutionary goals of the imperial neoco(he)ns, will not be that keen on fighting a war for ‘Wallstreet’ and decide that this is a proper moment to kiss the US goodbye, and constitutionally completely legal secede from the US and next merge with Mexico. Unsurprisingly they will get immediate backing and diplomatic recognition from China and Russia.
Pat Buchanan fears that the US will have committed suicide by the year 2025. I think that is overly optimistic and that it will happen much earlier and that everything will happen in a ‘convergence of catastrophes’:
– 9/11-truth coming out
– war in the Gulf and/or Chinese sea
– collapse of the dollar
– collapse of the oil flow to the West
– Germany leaving the West, followed by France and other European states (but not Britain and Poland)
– formation of a greater European alliance Paris-Berlin-Moscow, initiated by Putin, based on his oil & gas weapon
– beginning of the Balkanization of the US, comparable to the disintegration of the USSR
– The Euro-Americans will have a good look in the mirror and decide to join the European alliance (as a junior partner)
– China invades Australia, after the US is no longer around as protector of Anglosphere, after secretly having received the nod from the Europeans in return for an agreement to stay out of Siberia and Mongolia, to decrease their overpopulation problem.
– The Atlantic will be European, the Pacific Chinese sphere of influence.
– Japan will become more or less a Chinese satellite, The Islam will found a Khalifate around stanbul, led by Turkey (neo-Ottoman empire), the Shi’ites will have an (oil) empire of their own, India will remain independent, like Africa and Latin-America, now dominated by Mexico.
– The world will be multipolar indeed, but China and Greater Europe will be the dominating poles.
Cloud9 on Sat, 22nd Sep 2012 2:10 pm
Two things: It was a great scam while it lasted. We bought a lot of crude with a printing press. Now, perhapse, people will look to the southern border as a real security issue.
SOS on Sat, 22nd Sep 2012 2:12 pm
All of your assumptions are of course based on an America under the current leadership. We have the weakest, most ill advised, incompetent president since jimmy carter backed by an army of fools in the congress led by Pelosi and Reed. Pandering all to the basest human instincts leaving logic in the lurch. It really couldnt be any worse and that is why we see posts like Arthurs etc. They reflect the reality of life under this type of leadership.
SOS on Sat, 22nd Sep 2012 2:21 pm
The fact that Mexico and China are trading “off-dollar” simply makes their transaction more convenient. The current presidents policies toward spending and anti business rehtoric have turned countries away from dollar based trasactions because the dollar is too volatile and represents another layer of risk.
Dont read doom and gloom into this. It has no bearing on the USA. What you should be concerned about are the policies that ruin the dollars reliability as the reserve currency. This is a direct result of the presidents misguided spending policies and congress not being able to counter.
The president does not have a budget, never has. The budget he did propose was defeated without 1 vote in favor.
As soon as this leadership is replaced with sound thinking leadership that understand the dynamics of management and wealth this country will stabilize and the currency will strengthen and stabilize.
Gold, silver, commodities will settle into affordable trading ranges, jobs will return with an improving business climate, welfare spending will decrease, government revenues increase, programs will be funded, debt paid and budgets balanced.
What we are experiencing now is short term. Its bad but its just a reflection of our current leadership.
MrEnergyCzar on Sat, 22nd Sep 2012 3:15 pm
Mexico won’t be exporting oil in 5 years unless they reverse their terminal decline rates…
MrEnergyCzar
DMyers on Sat, 22nd Sep 2012 9:24 pm
Well, we know Saddam Hussein signed his own death certificate by threatening to trade oil in other than dollars. Mexico is a very different case for many obvious reasons that don’t need mentioning. As EnergyCzar points out, Mexico is on a downward trend in oil exports. For that, this is rather insignificant in the larger scheme of things.
It has symbolic significance. It tells the world it’s okay to do this if you’re getting squeamish about the dollar. The entire world, other than America, has serious concerns about the dollar. What if everyone were to engage in oil transactions in other currencies? The value of the dollar would plummet.
What may be more significant is China investing to improve the Mexican economy. Overall, the Chinese are smarter than we are. It is clear now that the growth/consumer driven economy has outlived its time. Unfortunately, China has already set its course on emulating that same Western industrial/transport model. Starting fresh in an undeveloped country like Mexico could offer the opportunity to engineer a new way.
Plantagenet on Sat, 22nd Sep 2012 11:31 pm
Why would Mexico or anyone else want dollars? Dollars are loosing their value rapidly due to Obama’s huge deficits and Bernanke’s printing press.
BillT on Sun, 23rd Sep 2012 12:13 am
All who think it is the government’s fault fail to see behind the curtain. It is the world’s central bankers that are engineering the coup. The President has not been in control for a long time. At least since 1913. It does not matter which tool ‘wins’ in November, nothing will change except who sleeps in the White House.
Arthur, you seem to have the whole picture outlined in your reply. I tip my non-existent hat to your understanding of world events.
SOS, as usual is busy blaming his favorite scape goats and does not see the 2×5 headed for his face.
I enjoy all of your comments as much as the articles because they make me think and reevaluate my own understanding. Thank you.
Kenz300 on Sun, 23rd Sep 2012 3:44 pm
Instead of spending more money on the defense department than any other country in the world the US needs to cut its spending on defense and invest in technology, education and infrastructure in the US.
SOS on Sun, 23rd Sep 2012 9:01 pm
Kenz300 is of course right on track, but first we have to shed the idea that we need mideast energy. We dont. We have way more than enough here.
Jimmy carter along with conservationists etc formed a coalition in the 1970’s that severely curtailed production of Americas lucrative energy resources. This forced the US into a policy of importing oil/gas which, of course involves a huge military presence in the Mid-East to protect US “interests”. Its clearly their fault we are engaged over there. Obama perpetuates those policies in spades.
To properly develop, in an orderly fashion, the resources we have in North America will assure all North Americans a reliable, ample and affordable energy supply. It will also enrich our nations solving most if not all financial problems.
One candidate for president is developing these policies. Support them. Make peak politics equal affordable eneregy, not peak oil.