As a reminder, nothing lasts forever…
The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.
“The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank.
“The solution to this is to replace the national currency with a global currency.”
The writing is on the wall for dollar hegemony. As Russian President Vladimir Putin said almost two months ago during the BRICs summit in Xiamen,
“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 regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”
As Pepe Escobar recently noted, ‘to overcome the excessive domination of the limited number of reserve currencies’ is the politest way of stating what the BRICS have been discussing for years now; how to bypass the US dollar, as well as the petrodollar.
Beijing is ready to step up the game. Soon China will launch a crude oil futures contract priced in yuan. This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan. Inbuilt in the move is a true Chinese win-win; the yuan – according to some – will be fully convertible into gold on both the Shanghai and Hong Kong exchanges.
The new triad of oil, yuan and gold is actually a win-win-win. No problem at all if energy providers prefer to be paid in physical gold instead of yuan. The key message is the US dollar being bypassed.
China’s plans for oil futures trading go back more than two decades, with the government introducing a domestic crude contract in 1993 and stopping a year later amid an overhaul of its energy industry. But in 2013, we first hinted at the birth of the petroyuan was looming…
In doing so China is effectively lobbing the first shot across the bow of the Petrodollar system, and more importantly, the key support of the USD in the international arena… setting the scene for the petroyuan.
And now, we are within two months of it becoming a reality as China prepares to roll out a yuan-denominated oil contract within the next two months…
“Approval of the trading rules by the securities regulator marks the clearance of a major hurdle toward launch of the contract,” Li Zhoulei, an analyst with Everbright Futures, said by phone.
“The latest rules raised entry threshold for investors from the draft rules, which shows the government wants to avoid volatility when it first starts trading.”
Which, according to Adam Levinson, of hedge fund manager Graticule Asset Management Asia, will be a “wake up call” for investors who haven’t paid attention to the plans.
A Yuan-denominated oil contract will be a “huge story” in the fourth quarter.
“The contract is a hedging tool for Chinese oil companies. We’re convinced Chinese oil companies will be anchor investors in the Aramco IPO.”
All of which fits with recent comments and actions from Russian and Venezuelan officials…
“Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,” Maduro said in a multi-hour address to a new legislative “superbody.” He reportedly did not provide details of this new proposal.
Maduro hinted further that the South American country would look to using the yuan instead, among other currencies.
“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro also said.
Additionally, Levison warns Washington that besides serving as a hedging tool for Chinese companies, the contract will aid a broader Chinese government agenda of increasing the use of the yuan in trade settlement… and thus the acceleration of de-dollarization and the rise of the Petro-Yuan.
“I don’t think there’s any doubt we’re going to see use of the renminbi in reserves go up substantially”
Levinson was even more sanguine about China’s growing credit exposure. While Chinese debt-to-GDP continues to rise, we note that Chinese sovereign credit risk has collapsed to 9 year lows…
Which as Levinson notes, “All the issues in China are occurring without fully understanding the asset side of the balance sheet.” He is not concerned about China credit issues in the near-term, defining the near term as the next two years, as “the capacity of the sovereign to deal with an issue, should it occur, is pretty significant and therefore important.”
Which appears to the market’s perspective as China is now the least risky relative to US in four years…
Finally, while he is less concerned about China’s credit, Levinson warns that the lack of volatility as stocks and bonds rally is the “scariest part” of global markets…
“If I am concerned about anything it’s where the level of implied volatility trades,” Levinson said in an interview in Singapore on Tuesday.
“It is extremely low. If there is something to be concerned about in global markets, it’s the endogenous level of where implied volatility is trading.”
Small market declines could escalate quickly, Levinson said.
“You don’t know when an event or an issue is going to present itself,” he said.
“But when it does, the nature of the volatility construct in markets today is such that if you have a modest correction it will turn into a much more severe one in a short period of time, because of the entrenched structural short-selling of volatility.”
Any increase in market turbulence could trigger dramatic selling and the biggest of those events could be a broader adoption of China’s PetroYuan contract… as Levinson says “will be a huge story” in Q4.
zerohedge
makati1 on Wed, 25th Oct 2017 6:35 am
As goes the petrodollar, so goes the US. It is only a matter of time. The terrorist bully has to be taken down. The world is moving to other currencies that the US does not control. When China backs those yuan with gold it will be game over. The US has no gold to back anything with. Even the IMF sees the rise of the yuan and the decline of the dollar.
fmr-paultard on Wed, 25th Oct 2017 6:44 am
fake news ZH again
makati1 on Wed, 25th Oct 2017 6:47 am
fmr, it is not “fake news”. Obviously your current events education is lacking. It has been reported in many news sites across the world these last few weeks. Putting down the messenger does not change the message. Denial doesn’t either.
Hello on Wed, 25th Oct 2017 6:51 am
>>>>As goes the petrodollar, so goes the US
It’s the opposite as explained many times before. Are you incapable of learning? Pondering new ideas? Contemplating on them? Maybe sleeping a few days over them? Throwing them back and forth, wondering?
None of this, your capable of? Just same old same old zerohedge indoctrinated shit you repeat?
TheNationalist on Wed, 25th Oct 2017 6:53 am
The question is Makati, will the power go their head like the yanks?
Do you see them staying calm and enlightened like Confucius or will human nature take over and a few new Tibets appear suddenly with chinese drones delivering swift “justice”. Afterall I’m sure Jinping could take unillateral action against the Phillipines/Australia if we “develop a weapons program” or “opress our people” or say the wrong thing at U.N. etc.
I have a feeling at some point any excuse will do, every empire has been the same in the end.
makati1 on Wed, 25th Oct 2017 6:57 am
FYI fmr:
“China wants to dethrone dollar, RMB-denominated oil contracts”
https://www.cnbc.com/2017/10/24/petro-yuan-china-wants-to-dethrone-dollar-rmb-denominated-oil-contracts.html
“Hedge Fund: China’s Petro-Yuan Plan Could Upend Oil Markets”
https://oilprice.com/Latest-Energy-News/World-News/Hedge-Fund-Chinas-Petro-Yuan-Plan-Could-Upend-Oil-Markets.html
“China’s launch of ‘petro-yuan’ in two months sounds death knell for dollar’s dominance”
http://www.newsifi.com/world/chinas-launch-of-petro-yuan-in-two-months.htm
“China will ‘compel’ Saudi Arabia to trade oil in yuan — and that’s going to affect the US dollar”
https://www.cnbc.com/2017/10/11/china-will-compel-saudi-arabia-to-trade-oil-in-yuan–and-thats-going-to-affect-the-us-dollar.html
“Why The Petrodollar Is Facing Its End”
https://oilprice.com/Energy/Energy-General/Why-The-Petrodollar-Is-Facing-Its-End.html
And on and on…
Cloggie on Wed, 25th Oct 2017 7:01 am
fake news ZH again
Nobody will fool paultard, so much is certain.
/rolleyes
Avoiding the usual “conspiracy sites”:
https://www.cnbc.com/2017/10/24/petro-yuan-china-wants-to-dethrone-dollar-rmb-denominated-oil-contracts.html
https://oilprice.com/Latest-Energy-News/World-News/Hedge-Fund-Chinas-Petro-Yuan-Plan-Could-Upend-Oil-Markets.html
https://www.rt.com/business/407704-china-oil-plans-yuan-contract/
https://deutsche-wirtschafts-nachrichten.de/2017/10/25/angriff-auf-den-dollar-china-bereitet-petro-yuan-vor/
Cloggie on Wed, 25th Oct 2017 7:02 am
Sh*t, makati beat me to it with 4 minutes.
makati1 on Wed, 25th Oct 2017 7:05 am
China is a long way from empire and will likely never get there. I don’t think that is their goal. Trade is. If you control trade, you don’t need militaries.
They know that. America doesn’t. They already control trade with the US. The US is deponent on Chinese goods to the tune of a $250B trade deficit to China each year. China is building its economy by spending most of that $250B on things of real value like ports, railroads, farms, etc.
Interesting to watch. but nothing I am worried about.
makati1 on Wed, 25th Oct 2017 7:06 am
Hahaha! You gotta be fast, Cloggie.
TheNationalist on Wed, 25th Oct 2017 7:15 am
If you have a vast global trade system you have an empire. You will also need a military in the end as nobody likes a monopoly and money going off-shore for very long ( despite the propoganda telling us how good rubber dogshit from China is).Good luck “downsizing” Jinping , he will have a civil war.
I’m sorry but I disagree, I have none of your self loathing and white america and Europe/Australia will never accept a Chinese overlord. I would rather nuke us all.
I am not a bible basher but did the bible not say a yellow race will destroy the Earth?, the way they are going it will happen.
From my cold dead hands as they say.
Jef on Wed, 25th Oct 2017 7:44 am
How many petroyuans to the dollar…thats all that matters.
Davy on Wed, 25th Oct 2017 8:31 am
This petro Yuan has not even been introduced and it is already the case by the anti-Americans that the petro dollar will be destroyed and along with it the US dollar. Mad kat goes so far to say the entire US is going down because of this. This petro Yuan in many ways shows just how incomplete the yuan is as a potential reserve currency. The last I saw this petro yuan will be convertible in gold if desired. That is because many are worried about a hybrid currency pegged to the dollar and manipulated at will by a ministry. The Yuan can be devalued overnight by a ministry. Yea the dollar is manipulated but it is manipulated the good old fashion way by markets and central banks.
The dollar is a long way from being eliminated in world trade. China is an exporting country they are not in the position to hold a reserve currency. There is not enough cooperation for an IMF currency. The current system will likely continue with the penetration of the dollar dominated system by a Russian Chinese alternative. This will only go so far because China and the US have a 600BIl bilateral trade. China and Russia are on track to be 60BIL. That tells you right there how far an alternative to the dollar is because Russia and China are the prime architects. IMA the petro in Yuan currently means yuan used in the oil trade. That is not very much in relation to the big picture. The yuan is used in less than 2% of global payments. That is rising quickly but it points to how far the currency needs to go. The petro side of this equation is becoming less important whether that be the Yuan or the dollar. Pero states are downsizing their wealth funds not growing them.
This is all a case of hoopla by the extremist anti-Americans and those who are enamored by the Brics. Tell me lately what is going on with the Bric bank? How is everyone doing on the debt front? China is up around 300% of GDP. You can whine that this mostly internal Chinese issue but then that just goes to show how much you know about the systematic nature of risk in an economy. Have you ever heard of a Minsky Moment? For the Euro guys here the Euro/Pound is used for nearly as much global trade payments as the dollar. Euro guys should be saying something about that and the rise of China. Instead our resident Euro guy is crowing about the end of the dollar. He says nothing of the threat of the Yuan to the Euro.
I would further say this article is more sensationalism by Zero Hedge. This topic has been out for months now. I go to Zerohedge often but I wade through a lot of shit. They have some good alternative financial articles and many not from them. China is a rising power on all fronts but they are also a rising risk for the entire system because of their use of debt bubbles to inflate economic activity. Their lack of transparency even to themselves is alarming. There is no historic precedence for the use of debt and bubbles in an economy like China. They are off the charts in this regards as a country engaged in this activity as a matter of policy. China is not a financial superpower. They are a rising power causing the decline of US hegemony. It will not be long until the US is much less important as it is now but everything points to the US continuing to be a major player along with China and Europe.
China is not in any way a power of clean fundamental financial stewardship and in no way point to something good in the future. If they do one important thing it will to be a counterweight to the dollar and the western financial system. This system is not as fair as it should be and it is being used far too regularly by the US as a tool of foreign policy. It is vital for the global system to use the dollar less because of the risk of so much trade and debt in one currency. It is really too bad there are few alternatives and the Chinese version so corrupted by debt and manipulation. This is far too complicated for the anti-Americans here. They want the dollar dead and the US gone “yesterday” so any sensationalism is blown off the charts. Their lack of understanding magnifies this agendist behavior. This is pure sensationalized on Zerohedge by those who are selling financial products. It sounds great for some and hence all the “clicks” it generates. If anything this petro Yuan is an example of a budding multipolar world in a dark and dangerous global economic system in decline and decay.
Davy on Wed, 25th Oct 2017 8:37 am
“Hahaha! You gotta be fast, Cloggie.”
Did either of you read what you referenced? LOL. Nope because neither of you said anything about the reality of what is going on. You just crowed and beat your chests and danced around the campfire passing the whisky.
deadlykillerbeaz on Wed, 25th Oct 2017 8:41 am
Let me know when the yuan is used as currency in the US.
Last I checked, the Chinese expats were cashing in their worthless yuan for worthless dollars. What difference will it make?
Didn’t Tricky Dick Nixon ambush four college students at Kent State many moons ago?
So what is the big deal if a few armed folks ambush four US soldiers in Niger?
Pot calling the kettle black.
On October 25, 732 CE, Chucky Martel defeated the Saracens at Poitiers.
Here endeth today’s history lesson.
Have a good day! Cheers!
Cloggie on Wed, 25th Oct 2017 8:57 am
“Did either of you read what you referenced? LOL. Nope because neither of you said anything about the reality of what is going on. You just crowed and beat your chests and danced around the campfire passing the whisky.”
So what did we miss then?
Davy on Wed, 25th Oct 2017 9:10 am
“ So what did we miss then?”
It is very easy to be a whining extremist and google headlines and finally post headlines as links with only a few worlds reference and or discussed. Mad kat is a expert with this. He just cherry picks facts and posts them with little discussion. He is always accusing me of saying too much on a topic lol that is because he is bereft of knowledge on so many topics. Why not say something on the topic with at least a couple of paragraphs? Maybe the reason you are not saying anything is the subject is a little more complicated. Agendist will have a hard time giving an accurate account of the issue. You have to do a lot of cherry picking through such articles looking for the sensationalism. The problem is the exposure this sensationalism is subject too. Sensationalism and extremism that promotes an agenda always have gaping holes in them.
Dredd on Wed, 25th Oct 2017 9:33 am
Some blogs saw this coming (First Shots Fired In The Currency Wars, Mar. 2009)
“Russia pulls out of the petrodollar” (The Peak Of The Oil Wars – 12, 2015).
Revi on Wed, 25th Oct 2017 9:44 am
This is big news, but it takes a while for a reserve currency to go down. It took the British quite a while to wreck the French currency. They were working on the Spanish Real in the 1800’s. They would mint fake reales with silver outside and copper inside to destroy the confidence in their currency. That’s why the Chinese would use chop marks to see if there was any copper in there. We are in for a big currency war, but it won’t kill the dollar as the reserve currency in 2 months. It will take years. This is just the first shot across the bow!
Davy on Wed, 25th Oct 2017 10:13 am
Revi, currencies are a zero sum gain “game” longer term. China can’t afford a reserve currency as-is and do what it is doing now. China has no option but to do what it is doing to manage social harmony. Longer term the dollar will likely end as all other fiat currencies end as we know it in one big global financial collapse of some sort. What that leads to is anyone’s guess. No one in this world and even the most powerful computers have that answer. We are talking fate and destiny.
Outcast_Searcher on Wed, 25th Oct 2017 10:32 am
1). Big yawn. Since the huge, diverse, robost FX markets exist and trade electronicially, this is 99% noise signalling nothing.
2). With this statement (lacking any meaningful backing/logic), the idea that this means anything vanishes. It’s politics, period:
“The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank.
But by all means, this is an excuse for fast crash doomers to declare the end of the economy, of the dollar, etc. yet another time, and be clueless about basic economic forces again.
So what is better to hold, pray tell? China, which can’t be trusted? Japan, in serious debt with bad demographics? The hapless Europe which best case isn’t growing much, and worse case is slowly unraveling (as far as EU cohesion)?
Gold and Silver? High as they are they have been TERRIBLE investments vs. even inflation over the past several decades. (I still hold some for a disaster/inflation hedge, but NOT as a capital growth medium).
…
Without meaningful answers to questions like this, this is just empty noise. Of course, that’s what the likes of zerohedge produce.
Cloggie on Wed, 25th Oct 2017 10:37 am
It is very easy to be a whining extremist and google headlines and finally post headlines as links with only a few worlds reference and or discussed. Mad kat is a expert with this. He just cherry picks facts and posts them with little discussion. He is always accusing me of saying too much on a topic lol that is because he is bereft of knowledge on so many topics. Why not say something on the topic with at least a couple of paragraphs? Maybe the reason you are not saying anything is the subject is a little more complicated. Agendist will have a hard time giving an accurate account of the issue. You have to do a lot of cherry picking through such articles looking for the sensationalism. The problem is the exposure this sensationalism is subject too. Sensationalism and extremism that promotes an agenda always have gaping holes in them.
One big smokescreen full with emotional accusations and insults to divert attention away from the fact that China is going to offer oil contracts nominated in yuan.
As Revi says, this is not going to kill the petro-$ instantaneously, but it certainly diminishes the US mid-term ability to export inflation and hence the ability to print unlimited amounts of money.
Revi, currencies are a zero sum gain “game” longer term. China can’t afford a reserve currency as-is and do what it is doing now.
Complete BS. The reserve currency indicates power and who is rising and who is declining. It is NOT a zero sum game.
Davy on Wed, 25th Oct 2017 11:14 am
Clogged mind, what’s da madder am I irritation your emotional agenda. Is that all you have to say? Do you know the difference between a petro currency and a reserve currency? Do you know anything about finance and economics that is not agenda driven to support your fantasy Euro empire and corresponding bipolar Chinese Asian superpower agenda? Clog read OS comment for even more mud on your agenda. You extremist are like fleas and jump on any warm hairy body available to promote your agenda.
fmr-paultard on Wed, 25th Oct 2017 12:06 pm
where will china dump their products? this is some ex- guy, not official chinese position
Cloggie on Wed, 25th Oct 2017 12:11 pm
Irritated, me? Make sure you have your tranquillizers pills at hand Davy:
http://www.worldbank.org/en/region/eca/publication/golden-growth
“Golden Growth: Restoring the Lustre of the European Economic Model”
https://www.theguardian.com/commentisfree/2017/jun/18/brexit-europe-eu-golden-decade-merkel-macron
“Britain is leaving the EU – just as Europe is on the up”
http://gulfnews.com/opinion/thinkers/britain-is-exiting-the-eu-just-as-europe-s-golden-decade-is-dawning-1.2046260
“Britain is exiting the EU just as Europe’s golden decade is dawning”
fmr-paultard on Wed, 25th Oct 2017 1:32 pm
good god, eurotard is all over the map, pivoting toward russia, china, phils, vanatua. it seems this is a globalist position
J. H. Wyoming on Wed, 25th Oct 2017 2:38 pm
Doesn’t that beat all? The US through its arrogant greediness opts for globalization or one might say cheap Chinese goods because it helps the wealthiest corporate owners like Walmart, then it comes back to bite them in the arse by way of a gold backed Yuan oil exchange. Boomerang! China’s not strolling past the US, its leapfrogging them. Ouch!!!
Once that exchange is up and running in a couple of months, you can bet your ‘last’ petro dollar all those countries that hate the US (partly because of insane Trump) will do whatever they can to avoid the petro dollar. What will happen to the US stock market following that development? Not good my folks. Unfortunately Mak has this one pegged and it’s not going to be good for the US. Not collapse, but probably a really harsh recession followed by who knows what. More tax cuts for the top 1% I’m sure as a last ditch effort to jolt the sucker back into economic coherence.
Antius on Wed, 25th Oct 2017 3:57 pm
I’m with Davy on this one. The Chinese are selling foreign exchange reserves like crazy, and blocking all routes capable of allowing capital out of the country, in a desperate attempt to stop their currency from sinking into the Earth’s core. Far from a signal of strength, this is an act of desperation. One last throw of the dice, for a corrupt dictatorship with debt exceeding 300% of GDP.
MASTERMIND on Wed, 25th Oct 2017 4:24 pm
Sorry Madkat another peer reviewed study that debunks your fantasy about china. And this was done by their own government.
China Government Study: China’s Oil Production is About to Peak in 2018 & Coal in 2020 (Wang, 2017)
https://link.springer.com/article/10.1007/s12182-017-0187-9
Ouch China…So close…
Cloggie on Wed, 25th Oct 2017 4:26 pm
https://www.cnbc.com/2016/05/09/chinas-debt-worse-than-you-think-but-maybe-not-be-a-problem.html
China’s debt: Worse than you think, but maybe not a problem
But does it matter?
Still, it’s not clear that any of this is pointing to the “ticking time bomb” that some Western investors have predicted.
It will definitely cause some headaches for Chinese lenders in the coming years, but several economists told CNBC that predictions of a financial crisis misunderstand how China’s economy and politics are designed to operate.
“The primary goal of the financial system as a whole is not to make money, it’s to obey instructions: The bulk of it is politics first, and profit second,” said Derek Scissors, a scholar for the American Enterprise Institute, who added that he doesn’t buy “the collapse argument.”
That is, financial institutions, state-owned enterprises and even many “private” firms act, at the end of the day, as an extension of Beijing. So loans and debts, some argue, are really all items on the same consolidated balance sheet.
“It can be netted out to a certain degree,” Veron said, adding that China has a history of restructuring the debts in its economy.
And because there’s a political directive to maintain social stability — a key tenant for Chinese leadership — lenders may likely allow for debt restructuring in a way that the system in the West would not. So the “time bomb” might not explode anytime soon.
“I’m sanguine that you won’t see financial instability of the type of 2007-2008 in the North Atlantic crisis,” Veron said. “The instability piece was linked to the fact that we have essentially market-driven financial systems, and that’s just not the case in China.”
Antius on Wed, 25th Oct 2017 4:37 pm
Chinese conventional oil production has already peaked. So has coal. Gas production may keep rising for a while, but it too will hit constraints by 2030.
https://www.alternet.org/world/chinas-oil-production-about-peak
The Chinese economic miracle was export driven, built on cheap energy and cheap labour. The cheap energy is gone. Guess what happens next?
Antius on Wed, 25th Oct 2017 4:41 pm
“China’s debt: Worse than you think, but maybe not a problem
But does it matter?”
We will see. We may not have too long to wait before we find out.
MASTERMIND on Wed, 25th Oct 2017 4:44 pm
Antius I agree. watch Madkat1 will totally ignore this post now. Or he will argue some sort of lunatic conspiracy theory about the study done or its authors. The truth is China arrived at oil party right after the neighbors had already called the cops. And soon they will be kicking down the door and it be party over for everyone.
makati1 on Wed, 25th Oct 2017 5:27 pm
MM, did you miss this?
“Duterte to allow PH oil exploration with Chinese, Malaysian firms: DOE”
http://news.abs-cbn.com/business/09/27/17/duterte-to-allow-ph-oil-exploration-with-chinese-malaysian-firms-doe
“Duterte open to joint exploration with China in West PH Sea”
It’s called ‘diplomacy’ and ‘negotiations’. Only the US wants war. Everyone else wants trade and peace.
makati1 on Wed, 25th Oct 2017 5:30 pm
Oops! missed the ref for the 2nd article:
https://www.rappler.com/nation/politics/elections/2016/121389-rodrigo-duterte-joint-exploration-china-west-philippine-sea
rockman on Wed, 25th Oct 2017 5:33 pm
I guess the Rockman doesn’t understand all this high falutin’ international trade busisness. So when the yuan takes over will the Canadians shipping oil to the US will require those companies to pay in yuan? When Germany buys oil from the Saudis will they have to covert their currency to yuan? And if they do this how EXACTLY do the Saudis calculate how much a bbl of oil is worth in yuan? In fact, can someone tell me how much a bbl of Russian oil is worth in yuan that EU buyers will have to transfer to Russian bank accounts? And, more import, how did you come up with that number?
Simple questions so I expect simple answers. Thanks in advance.
And Mak: when the yuan becomes the “reserve currency” will those Chinese companies selling hundreds of $BILLIONS per year to US consumers require payments in yuan and not dollars?
Davy on Wed, 25th Oct 2017 5:45 pm
Inflating multiple bubbles with debt whether an extention of the state or not is not sound policy long term. Bad debt and non performing bank loan are everywhere in China. This is systematic and part of the financial fabric. Shadow banking and fraudulent accounting practices add up to a huge systematic risk source. You just don’t clean rot up. It is malinvestment that expects a return but in fact is a value sink. Value is actually destroyed. Bad debt is extended and worse it is pretended to have value. There are zombiie industries that are overproducing and over employing making social tranquility at risk. These things are more than just something a government can just clean up becuase it is their problem. China has huge issues and they have so many people hoodwinked. This happens becuase the Chinese are all about appearances and by many appearneces China is great until you dig down then you see how bad things are. Many here on this board want to believe China great because they want someone to take th US down. It is an emotional thingy.
Cloggie on Wed, 25th Oct 2017 5:50 pm
I guess the Rockman doesn’t understand all this high falutin’ international trade busisness. So when the yuan takes over will the Canadians shipping oil to the US will require those companies to pay in yuan?
No.
When Germany buys oil from the Saudis will they have to covert their currency to yuan?
Unlikely.
As I understand it: oil goes to China, yuan to Iran or Russia or Venezuela. China obviously wants this as they control yuan-printing (“out of thin air”). The trick is make their trading partners to want the yuan as well. Trading partner could want the yuan as China has a lot of products on offer.
Although the US$ is called THE reserve currency, in reality there are more reserve currencies, it is just that the $ is held by most (64%), followed by Euro (20%), Yen (4%), GBP (4%). The Yuan (1%) will see a growing share of the reserve currency palette (numbers 2016).
https://en.wikipedia.org/wiki/Reserve_currency
(scroll down for graph/table)
makati1 on Wed, 25th Oct 2017 6:15 pm
Davy’s Sinophobia is flaring up again. He thinks that China’s GROWING economy is comparable to the US ($200T) DEBT economy. Take away the US government dole and 40+ million Americans would be in huge bread lines all over the 50 states. Millions more US families would be on the street. The US economy would crash and burn if the Fed stoped printing worthless dollars by the billions. Davy never looks in a mirror, only the foggy one in Davy Land.
Boat on Wed, 25th Oct 2017 6:45 pm
MM,
MASTERMIND on Wed, 25th Oct 2017 4:24 pm
Sorry Madkat another peer reviewed study that debunks your fantasy about china. And this was done by their own government.
China Government Study: China’s Oil Production is About to Peak in 2018 & Coal in 2020
You can find stats showing peak China coal happened in 2013. Been dropping ever since.
https://www.ceicdata.com/en/indicator/china/coal-production
global peak coal production happened in 2014.
https://www.bloomberg.com/news/articles/2017-06-13/coal-s-era-starts-to-wane-as-world-shifts-to-cleaner-energy
MASTERMIND on Wed, 25th Oct 2017 6:50 pm
Madkat1 hahahahhah beliving NBC the GE corporations MSM propaganda outlet. HAHAH. You mock people all the time for believing the US propaganda. And then what do you do. You do a google search and the first piece of propaganda you find you use. And our way too dumb to even notice the irony.
Boat on Wed, 25th Oct 2017 6:53 pm
mak,
Do the P’s get a dole? Just enough food to reach 5’3″. lol
Davy on Wed, 25th Oct 2017 6:54 pm
mad kat, your understanding of economics is almost as bad as your military knowledge. Your above comment is pure emotions without substance or backup. It is not worth a retort. You are incapable of a discussion without your agenda getting in the way.
J. H. Wyoming on Wed, 25th Oct 2017 6:57 pm
I think the problem for the US are two issues:
1) China has gold and the US isn’t even talking about how much they have anymore, so China wins on amount of vaulted gold to back the petroyuan.
2) The rest of the world and many US citizens do not like Trump, and this will push numerous countries to opt for the Chinese oil exchange instead of the petro dollar.
Now there may be some cases in which that doesn’t happen, like Canada to the north of the US would probably remain with the petro dollar. But most other countries I think will make the transition.
And really it’s about time – the US has had a long period of time as the #1 reserve currency but they’ve abused the right by way of QE, selling their gold and generally just printing money to make loans willy nilly.
It’s time for repercussions. It’s time for the US to play 2nd fiddle.
Davy on Wed, 25th Oct 2017 7:02 pm
“1) China has gold and the US isn’t even talking about how much they have anymore, so China wins on amount of vaulted gold to back the petroyuan.”
Got any backup or is that your emotions talking?
“2) The rest of the world and many US citizens do not like Trump, and this will push numerous countries to opt for the Chinese oil exchange instead of the petro dollar.”
What a friggen joke. People don’t care about politicians they care about getting a good price.
“Now there may be some cases in which that doesn’t happen, like Canada to the north of the US would probably remain with the petro dollar. But most other countries I think will make the transition.”
“It’s time for repercussions. It’s time for the US to play 2nd fiddle.”
Oh now we are speculating on our emotional beliefs that we know what other countries believe.
Wyoming what grade level are you? Are you a mad kat sock puppet?
makati1 on Wed, 25th Oct 2017 7:03 pm
Boat, Yes there are a few small beanies for poorer Filipinos. FREE basic medical care is one of them. How much do YOU pay for your Healthcare program?
“The Philippine health sector is mostly run for private profit, as is the higher education sector. Government expenditure on health is about P100 billion ($2B US) and total expenditure, including patients’ own payments [which account for more than half of total expenditure], insurance scheme payments and grants, takes the total up to P526 billion, or 4 percent of GDP.”
Keep in mind that doctors here cost $12 per visit (P600) And hospital rooms cost $20/day (P1,000) So a dollar buys a lot more healthcare here than in the US. AND the quality of treatment is equal or better than in the US.
makati1 on Wed, 25th Oct 2017 7:07 pm
Davy, how can I back up anything about the US? All they print are lies and coverups.
There is no gold in Fort Knox. If there were, they would be advertising it and taking tours for the press like in the days when you were in diapers. YOU are the one who denies everything you do not agree with.
Your dream America is dead. The new fascist American police state is well and growing. Adjust or die.
Davy on Wed, 25th Oct 2017 7:07 pm
“Boat, Yes there are a few small beanies for poorer Filipinos. FREE basic medical care is one of them. How much do YOU pay for your Healthcare program?”
Got any references on free health care mad kat? You know, what is the real deal, not what is claimed. It is well known that the poor of the P’s suffer. You are full of shit yet again today.
Who cares about the P’s anyway. There is an inordinate amount of time spent discussing the P’s because of you mad kat.
Davy on Wed, 25th Oct 2017 7:09 pm
You have nothing to prove there is gold or not mad kat so you are just speculating and that is almost all you do. You are a google brat that references things without understanding. It basically sounds good to you is all.
deadlykillerbeaz on Wed, 25th Oct 2017 7:24 pm
I suppose if you go to Canada to buy some Canadian blended oil, say 100,000 barrels, 5,000,000 USD cost, go to the Bank of Canada to trade for 330,000,000 yuan to buy the oil, then hand it to the seller, it would be a done deal.
You know how much dollars are shunned and the yuan desired.
Yeah, right.
It is all done on paper or digital, probably.
Who wants bitcoin to buy oil?