Schlagwort-Archive: #petrodollars

F. William ENGDAHL: Gold Oil Dollars Russia and China; New Eastern Outlook, Sep 13, 2017

globalcrisis/-change NEWS
Martin Zeis, 15.09.2017

Dear all,
below extracts of Engdahl’s epitome about the US-Dollar’s story since 1944 (Bretton Woods) until our day. In addition it’s appropriate to read Paul Craig Robert`s article “China Must Pray That US Carries out Its Threat to Cut It off From the Dollar” – URL: http://russia-insider.com/en/politics/china-must-pray-us-carries-out-its-threat-cut-it-dollar/ri20924
____________

13./14.09.2017 — https://journal-neo.org/2017/09/13/gold-oil-dollars-russia-and-chinahttp://russia-insider.com/en/politics/we-should-take-latest-china-russia-challenge-dollar-seriously/ri20900

Gold Oil Dollars Russia and China

We Should Take the Latest China-Russia Challenge to the Dollar Seriously

Wall Street and Washington are not amused, but they are powerless to stop it.

By F. William ENGDAHL

William Engdahl is one of the best in the world on this subject. He has been writing about the world monetary system for decades, and few writers have the wealth of insight and experience in the subject that he has. What Engdahl says, matters.

Intro:

The 1944 Bretton Woods international monetary system as it has developed to the present is become, honestly said, the greatest hindrance to world peace and prosperity.

Now China, increasingly backed by Russia—the two great Eurasian nations—are taking decisive steps to create a very viable alternative to the tyranny of the US dollar over the world trade and finance.

Wall Street and Washington are not amused, but they are powerless to stop it.


Shortly before the end of the Second World War, the US Government, advised by the major international banks of Wall Street, drafted what many mistakenly believe was a new gold standard. In truth, it was a dollar standard in which every other member currency of the International Monetary Fund countries fixed the value of their currency to the dollar. In turn, the US dollar was fixed then to gold at a value equal to 1/35th of an ounce of gold. At the time Washington and Wall Street could impose such a system as the Federal Reserve held some 75% of all world monetary gold as a consequence of the war and related developments. Bretton Woods established the dollar which then became the reserve currency of world trade held by central banks.

Death Agony of a Defective Dollar Standard

By the end of the 1960’s with soaring US Federal budget deficits from costs of the Vietnam War and other foolish spending, the dollar standard began to show its deep structural flaws. A recovered Western Europe and Japan no longer needed billions of US dollars for financing reconstruction. Germany and Japan had become world class export economies with higher efficiency than US manufacturing owing to a growing obsolescence of US basic industry from steel to autos and basic infrastructure. Washington should then have significantly devalued the dollar against gold in order to correct the growing world trade imbalance. Such a dollar devaluation would have boosted US manufacturing export earnings and reduced the trade imbalances. It would have been a huge pus for the real US economy. However for Wall Street banks it spelled huge losses. So instead, the Johnson and then Nixon administrations printed more dollars and in effect exported inflation to the world.

The central banks of especially France and Germany reacted to the deafness in Washington by demanding US Federal Reserve gold for their US dollar reserves at $35 per unce s in the Bretton Woods 1944 agreement. By August 1971 the redemption of gold for inflated US dollars had reached a crisis point where Nixon was advised by a senior Treasury official, Paul Volcker, to rip up the Bretton Woods system.

By 1973 gold was allowed by Washington to trade freely and was no longer the backing of a sound US dollar. Instead, an engineered oil price shock in October 1973 that sent the dollar price of oil higher by 400% in a matter of months, created what Henry Kissinger then called the petrodollar.

The world needed oil for the economy. Washington, in a 1975 deal with the Saudi monarchy, insured that Arab OPEC would refuse to sell one drop of their oil to the world for any currency other than US dollars. The value of the dollar soared against other currencies such as the German Mark or Japanese Yen. Wall Street banks were awash in petrodollar deposits. The dollar casino was open and running, and the rest of the world was being fleeced by it.

In my book, Gods of Money: Wall Street and the Death of the American Century, I detail how the major New York international banks such as Chase, Citibank and Bank of America used the petrodollars then to recycle Arab oil profits to oil-importing countries in the developing world during the 1970’s, laying the seeds for the so-called Third World Debt Crisis. Curiously, it was the same Paul Volcker, a protégé of David Rockefeller and Rockefeller’s Chase Manhattan Bank, who this time, in October, 1979 as Chairman of the Fed, triggered the 1980s debt crisis by pushing Fed interest rates through the roof. He lied and claimed it was to nip inflation. It was to save the dollar and the Wall Street banks.

Today, the dollar is a strange phenomenon to put it mildly. The United States since 1971 has gone from being a premier industrial nation to a giant debt-bloated casino of speculation.

With Fed Funds interest rates between zero and one percent the past nine years—unprecedented in modern history—the major banks of Wall Street, the ones whose financial malfeasance and murderous greed created the 2007 Subprime crisis and its 2008 global financial Tsunami, set about to build a new speculative bubble. Rather than lend to debt-bloated cities for urgently-needed infrastructure or other productive avenues of the real economy, instead they created another colossal bubble in the stock market. Major companies used cheap credit to buy their own stocks back, thereby spurring the stock prices on Wall Street exchanges, a rise fed by hype and myths about “economic recovery.” The S&P-500 stock index rose by 320% since the end of 2008. I can assure you those paper stock rises are not because the real US economy has grown 320%.

American households earn less in real terms each year over decades. Since 1988 median household income has been stagnant amid steadily rising inflation, a declining real income. They must borrow more than ever in history. Federal Government debt is at an unmanageable $20 trillion with no end in sight. American industry has been closed and production shipped offshore, “outsourced” is the euphemism. Left behind is a high-debt, rotted out “service economy” where millions work two even three part-time jobs just to keep afloat.

The only factor keeping the dollar from total collapse is the US military and Washington’s deployment of deceptive NGOs around the world to facilitate plundering of the world economy.

So long as Washington dirty tricks and Wall Street machinations were able to create a crisis such as they did in the Eurozone in 2010 through Greece, world trading surplus countries like China, Japan and then Russia, had no practical alternative but to buy more US Government debt—Treasury securities—with the bulk of their surplus trade dollars. Washington and Wall Street smiled. They could print endless volumes of dollars backed by nothing more valuable than F-16s and Abrams tanks. China, Russia and other dollar bond holders in truth financed the US wars that were aimed at them, by buying US debt. Then they had few viable alternative options.

Viable Alternative Emerges

Now, ironically, two of the foreign economies that allowed the dollar an artificial life extension beyond 1989 – Russia and China – are carefully unveiling that most feared alternative, a viable, gold-backed international currency and potentially, several similar currencies that can displace the unjust hegemonic role of the dollar today.

For several years both the Russian Federation and the Peoples’ Republic of China have been buying huge volumes of gold, largely to add to their central bank currency reserves which otherwise are typically in dollars or euro currencies. Until recently it was not clear quite why.

For several years it’s been known in gold markets that the largest buyers of physical gold were the central banks of China and of Russia. What was not so clear was how deep a strategy they had beyond simply creating trust in the currencies amid increasing economic sanctions and bellicose words of trade war out of Washington.

Now it’s clear why.

China and Russia, joined most likely by their major trading partner countries in the BRICS (Brazil, Russia, India, China, South Africa), as well as by their Eurasian partner countries of the Shanghai Cooperation Organization (SCO) are about to complete the working architecture of a new monetary alternative to a dollar world.

Currently, in addition to founding members China and Russia, the SCO full members include Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and most recently India and Pakistan. This is a population of well over 3 billion people, some 42% of the entire world population, coming together in a coherent, planned, peaceful economic and political cooperation.

If we add to the SCO member countries the official Observer States—Afghanistan, Belarus, Iran and Mongolia, states with expressed wish to formally join as full members, a glance at the world map will show the impressive potentials of the emerging SCO. Turkey is a formal Dialogue Partner exploring possible SCO membership application, as are Sri Lanka, Armenia, Azerbaijan, Cambodia and Nepal. This, simply said, is enormous.

BRI and a Gold-Backed Silk Road

Until recently Washington think tanks and the Government have sneered at the emerging Eurasian institutions such as SCO. Unlike BRICS which is not made up of contiguous countries in a vast land-mass, the SCO group forms a geographic entity called Eurasia. When Chinese President Xi Jinping proposed the creation of what then was called the New Economic Silk Road at a meeting in Kazakhstan in 2013, few in the West took it seriously. The name officially today is the Belt, Road Initiative (BRI). Today, the world is beginning to take serious note of the scope of the BRI.

It’s clear that the economic diplomacy of China, as of Russia and her Eurasian Economic Union group of countries, is very much about realization of advanced high-speed rail, ports, energy infrastructure weaving together a vast new market that, within less than a decade at present pace, will overshadow any economic potentials in the debt-bloated economically stagnant OECD countries of the EU and North America.

What until now was vitally needed, but not clear, was a strategy to get the nations of Eurasia free from the dollar and from their vulnerability to further US Treasury sanctions and financial warfare based on their dollar dependence. This is now about to happen.

At the September 5 annual BRICS Summit in Xiamen, China Russian President Putin made a simple and very clear statement of the Russian view of the present economic world. He stated, “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.” To my knowledge he has never been so explicit about currencies. Put this in context of the latest financial architecture unveiled by Beijing, and it becomes clear the world is about to enjoy new degrees of economic freedom.

China Yuan Oil Futures

(…)

further see attachment (pdf)

FWE-China+Russia-Challenge-of-USD170914.pdf

Shaun BRADLEY: The End Of The (Petro)Dollar: What The Fed Doesn't Want You To Know; antimedia/zerohedge 27.06.2017

Below Shaun BRADLEY surveys the increasingly loss of the Petro-Dollar’s importance and indicates, that the (US-backed) attacks on Qatar are motivated among other reasons by the country’s cautious shift away from the US currency …

Greets,
Martin Zeis

27.06.2017 — www.zerohedge.com/news/2017-06-27/end-petrodollar-what-fed-doesnt-want-you-know

The End Of The (Petro)Dollar: What The Fed Doesn’t Want You To Know

Authored by Shaun Bradley via TheAntiMedia.org

The United States’ ability to maintain its influence over the rest of the world has been slowly diminishing. Since the petrodollar was established in 1971, U.S. currency has monopolized international trade through oil deals with the Organization of the Petroleum Exporting Countries (OPEC) and continuous military interventions. There is, however, growing opposition to the American standard, and it gained more support recently when several Gulf states suddenly blockaded Qatar, which they accused of funding terrorism.

Despite the mainstream narrative, there are several other reasons why Qatar is in the crosshairs. Over the past two years, it conducted over $86 billion worth of transactions in Chinese yuan and has signed other agreements with China that encourage further economic cooperation. Qatar also shares the world’s largest natural gas field with Iran, giving the two countries significant regional influence to expand their own trade deals.

Meanwhile, uncontrollable debt and political divisions in the United States are clear signs of vulnerability. The Chinese and Russians proactively set up alternative financial systems for countries looking to distance themselves from the Federal Reserve. After the IMF accepted the yuan into its basket of reserve currencies in October of last year, investors and economists finally started to pay attention. The economic power held by the Federal Reserve has been key in financing the American empire, but geopolitical changes are happening fast. The United States’ reputation has been tarnished by decades of undeclared wars, mass surveillance, and catastrophic foreign policy.

One of America’s best remaining assets is its military strength, but it’s useless without a strong economy to fund it. Rival coalitions like the BRICS nations aren’t challenging the established order head on and are instead opting to undermine its financial support. Qatar is just the latest country to take steps to bypass the U.S. dollar. Russia made headlines in 2016 when they started accepting payments in yuan and took over as China’s largest oil partner, stealing a huge market share from Saudi Arabia in the process. Iran also dropped the dollar earlier this year in response to President Trump’s travel ban. As the tide continues to turn against the petrodollar, eventually even our allies will start to question what best serves their own interests.

Many E.U. member states are clashing with the unelected leadership in Brussels over immigration, terrorism, and austerity measures. If no solutions are found and things deteriorate, other countries could potentially follow the U.K.’s lead and vote to leave, as well. It is starting to become obvious that countries in Eastern Europe will look to the East to get the resources their economies need.

China, Russia, and India are all ahead of the curve and started stockpiling gold years ago. They recognize that hard assets will be the measure of true wealth in the near future — not fiat money. The historic hyperinflation that has occurred in these countries solidified the importance of precious metals in their monetary systems. Unfortunately, most Americans are ignorant of the past and will likely embrace more government bailouts and money printing when faced with the next recession. Even Fed officials have admitted that more quantitative easing is likely the only path going forward.

Several renowned investors have warned about this ongoing shift of economic power from West to East, but bureaucrats and central bankers refuse to admit how serious things could get. The impact on the average person could be devastating if they are not properly educated and prepared for the fallout. (…)

Der Nährboden des Terrors – Rainer Herrmann-28.11.2015

Auf Hinweis von G. Wendebourg:

In der FAZ (online) findet sich ein ausführlicher Artikel von Rainer Herrmann, der den Hintergrund des saudischen Imperialismus und des Terrorexports beleuchtet und lesenswert ist, auch wenn die Einbindung der Saudis in die Strategien der NATO-Länder dabei ausgelassen wird:

/Der Nährboden des Terrors /

//

/Seit einem halben Jahrhundert exportiert Saudi-Arabien mit Milliarden
Petrodollars seinen intoleranten Islam in alle Welt – und fördert damit
gezielt den Extremismus. /

///28.11.2015, von Rainer Hermann
<http://www.faz.net/redaktion/rainer-hermann-11123673.html>/

/Saudi-Arabien exportiert vor allem zwei Produkte: Erdöl und Islam. Das
saudische Erdöl ist das Schmiermittel für die Weltwirtschaft, der saudische  Islam aber ist eine Gefahr für den Weltfrieden. Vor mehr als einem halben  Jahrhundert hatte das Königreich begonnen, seinen rückwärtsgewandten und  intoleranten Islam zu exportieren. Rückwärtsgewandt ist er, weil er sich am  Vorbild der ersten Muslime orientiert und dazu den Koran buchstabengetreu  auslegt. Und intolerant ist dieser Islam, weil er alle Anhänger anderer  Auslegungen zu „Ungläubigen“ erklärt, die bekämpft werden müssen. Die Vertreter dieses wahhabitischen Islams sehen ihn seit seiner Entstehung im  18. Jahrhundert als die einzige wahre Form des Islams an – und als die
einzig wahre Religion überhaupt.//
//
//Das Ergebnis ist verheerend. Seit einem halben Jahrhundert wird die
saudische Missionsoffensive Jahr für Jahr mit Milliarden Petrodollars
finanziert. Sie richtet sich gegen den religiösen Pluralismus in der
islamischen Welt – gegen gemäßigte und säkulare Sunniten ebenso wie gegen  Anhänger des Sufismus und Schiiten, gegen Nichtmuslime sowieso. Diese  saudische Offensive schuf den theologischen und ideologischen Nährboden für  den heutigen Terror im Namen des Islams. Zwar finanziert das Königreich Saudi-Arabien die Terrormiliz „Islamischer Staat“ (IS) nicht direkt; denn der IS hat der saudischen Monarchie den Krieg erklärt. Das Königreich ist aber der Schöpfer dieses Ungeheuers, denn der IS ist die besonders gewalttätige Fortsetzung des wahhabitischen Islams.
…../

http://www.faz.net/aktuell/politik/ausland/saudi-arabien-bereitet-den-naehrboden-des-terrors-13934322.html?printPagedArticle=true#pageIndex_2

Petrodollar Panic? China Signs Currency Swap Deal With Qatar & Canada – Zerohedge – Nov 11, 2014

Zerohedge – Nov 11, 2014 — http://www.zerohedge.com/news/2014-11-10/petrodollar-panic-china-signs-currency-swap-deal-qatar-canada
Petrodollar Panic? China Signs Currency Swap Deal With Qatar & Canada
The march of global de-dollarization continues. In the last few days, China has signed direct currency agreements with Canada becoming North America’s first offshore RMB hub, which CBC reports (1) analysts suggest “could double maybe even triple the level of Canadian trade between Canada and China,” impacting the need for Dollars.But that is not the week’s biggest Petrodollar precariousness news, as The Examiner reports, a new chink in the petrodollar system was forged as China signed an agreement with Qatar to begin direct currency swaps between the two nations using the Yuan, and establishing the foundation for new direct trade with the OPEC nation in the very heart of the petro-dollar system. As Simon Black warns, “It’s happening… with increasing speed and frequency.”  (2)
Authorized by China’s central bank, the deal will allow direct business between the Canadian dollar and the Chinese yuan, cutting out the middle man – in most cases, the U.S. dollar.
Canadian exporters forced to use the American currency to do business in China are faced with higher currency exchange costs and longer waits to close deals.
“It’s something the prime minister has been talking about. He wants Canadian companies, particularly small- and medium-sized businesses, doing more and more work in China, selling goods and services there,” said CBC’s Catherine Cullen, reporting from Beijing.
It’s happening. With increasing speed and frequency. (3)
The People’s Bank of China and the Canadian Prime Minister’s office issued a statement on Saturday stating that Canada will establish North America’s first offshore renminbi trading center in Toronto.
China and Canada agreed on a number of measures to increase the use of renminbi in trade, business, and investment. And they further signed a 200-billion renminbi bilateral currency swap agreement.
Moreover, just today, hot off the presses, the central banks of China and Malaysia announced the establishment of renminbi clearing arrangements in Kuala Lumpur, which will further increase the use of renminbi in South-East Asia.
This comes just two weeks after Asia’s leading financial center, Singapore, became a major renminbi hub, with direct convertibility established between the Singapore dollar and the renminbi.
And as Black notes, everyone is in on the trend. All across the world, the renminbi is quickly becoming THE currency for trade, investment, and even savings.
Renminbi deposits in South Korea, for example, surged 55-times in one single year. It’s stunning.
The government of UK just issued a renminbi bond, becoming the first foreign government to issue debt in renminbi.
Even the European Central bank is debating to include renminbi in its official reserves, while politicians the world over are sounding not-so-subtle warnings that a new non-dollar monetary system is needed.  ….
Full text see attachment (pdf – 4p) and URL:  www.zerohedge.com/news/2014-11-10/petrodollar-panic-china-signs-currency-swap-deal-qatar-canada
Cheers,
Martin Zeis

China pivot fuels Eurasian century By Pepe Escobar

www.atimes.com/atimes/China/CHIN-01-190514.html
Asia Times / Greater China, May 19, 2014

China pivot fuels Eurasian century
By Pepe Escobar

A specter is haunting Washington, an unnerving vision of a Sino-Russian alliance wedded to an expansive symbiosis of trade and commerce across much of the Eurasian land mass – at the expense of the United States.

And no wonder Washington is anxious. That alliance is already a done deal in a variety of ways: through the BRICS group of emerging powers (Brazil, Russia, India, China, and South Africa); at the Shanghai Cooperation Organization, the Asian counterweight to the North Atlantic Treaty Organization; inside the Group of 20; and via the 120-member-nation Non-Aligned Movement (NAM).

Trade and commerce are just part of the future bargain. Synergies in the development of new military technologies beckon as well. After Russia’s Star Wars-style, ultra-sophisticated S-500 air defense anti-missile system comes online in 2018, Beijing is sure to want a version of it. Meanwhile, Russia is about to sell dozens of state-of-the-art Sukhoi Su-35 jet fighters to the Chinese as Beijing and Moscow move to seal an aviation-industrial partnership.

This week should provide the first real fireworks in the celebration of a new Eurasian century-in-the-making when Russian President Vladimir Putin drops in on Chinese President Xi Jinping in Beijing.

You remember “Pipelineistan,” all those crucial oil and gas pipelines crisscrossing Eurasia that make up the true circulatory system for the life of the region. Now, it looks like the ultimate Pipelineistan deal, worth US$1 trillion and 10 years in the making, will be signed off on as well. In it, the giant, state-controlled Russian energy giant Gazprom will agree to supply the giant state-controlled China National Petroleum Corporation (CNPC) with 3.75 billion cubic feet of liquefied natural gas a day for no less than 30 years, starting in 2018. That’s the equivalent of a quarter of Russia’s gas exports to all of Europe. China’s present daily gas demand is around 16 billion cubic feet a day, and imports account for 31.6% of total consumption.

Gazprom may still collect the bulk of its profits from Europe, but Asia could turn out to be its Everest. The company will use this mega-deal to boost investment in Eastern Siberia and the whole region will be reconfigured as a privileged gas hub for Japan and South Korea as well. If you want to know why no key country in Asia has been willing to “isolate” Russia in the midst of the Ukrainian crisis – and in defiance of the Obama administration – look no further than Pipelineistan.

Exit the Petrodollar, enter the Gas-o-Yuan
And then, talking about anxiety in Washington, there’s the fate of the petrodollar to consider, or rather the “thermonuclear” possibility that Moscow and Beijing will agree on payment for the Gazprom-CNPC deal not in petrodollars but in Chinese yuan.

One can hardly imagine a more tectonic shift, with Pipelineistan intersecting with a growing Sino-Russian political-economic-energy partnership. Along with it goes the future possibility of a push, led again by China and Russia, toward a new international reserve currency – actually a basket of currencies – that would supersede the dollar (at least in the optimistic dreams of BRICS members).

Right after the potentially game-changing Sino-Russian summit comes a BRICS summit in Brazil in July. That’s when a $100 billion BRICS development bank, announced in 2012, will officially be born as a potential alternative to the International Monetary Fund and the World Bank as a source of project financing for the developing world.

More BRICS cooperation meant to bypass the dollar is reflected in the “Gas-o-yuan”, as in natural gas bought and paid for in Chinese currency. Gazprom is even considering marketing bonds in yuan as part of the financial planning for its expansion. Yuan-backed bonds are already trading in Hong Kong, Singapore, London, and most recently Frankfurt. (…)