Outcast_Searcher wrote:Note -- I'm not forecasting anything here -- I'm simply pointing out a huge and obvious market and mechanism that essentially makes the whole risk of holding currency "X" over time disappear via endless convenient hedging choices.
Cog wrote:Without their oil exports, they starve.
AgentR11 wrote:Outcast_Searcher wrote:Note -- I'm not forecasting anything here -- I'm simply pointing out a huge and obvious market and mechanism that essentially makes the whole risk of holding currency "X" over time disappear via endless convenient hedging choices.
Agreed, it is mostly an accounting issue; but it is fundamental to the efficiency with which Russia and other countries that are sanctioned, and China can trade outside of SWIFT and Western currencies. Russia being the most interesting to me as they are both an energy and food calorie exporter.
I don't do the "risk of holding" argument at all; just noting the increasing float like characteristics of the Yuan and the increasing ease with which the two can clear and settle outside the Western system.
Yoshua wrote:I still wonder what would happen to the dollar if it's disconnected from oil. Would the dollar be massively devalued? Would the US economy experience hyper inflation? Would the Etp Models MAP be blown away? Would it cause massive financial disruptions around the world? Would the US economy tank?
I wonder if Russia and China really know what they are doing?
Jim Rickards calls China a communist nation that is playing with capitalism. He compares China to a 3 year old with a loaded gun: There will be some damage!
Yoshua wrote:Chinas attempt to link oil to the yuan might do in the Chinese miracle economy?
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