Russia and China are going to bury the petrodollar?

Since the seventies of the last century the U.S. dollar is the currency used by the international community in the oil trade. This fact has created a huge demand for U.S. dollars and U.S. debt. But what happens when the rest of the world will start to abandon the increasingly unstable U.S. dollar and come to the realization that as currency in international trade, you can use the gold? The truth is that this realization of the imagination is required.

Of course, this does not mean that a country's desire to move to gold right now is reprehensible. The world's media suggest that we are in the midst of "currency war", which is expressed in the competition between central banks around the world to the devaluation of their currencies.

So why would anyone in a similar situation to want to remain in the paper?

And of course one of the main culprits is the Federal Reserve System. The Fed is printing money like tomorrow end of the world, and the feeling that no one at the Fed and the U.S. government does not care about the fact that all of this printing petrodollar can put at risk.

In the end, our folly much easier for the rest of the world the task of parting with the dollar.

Some day it will happen. In truth, there are persistent rumors that Russia and China really set out to let it happen.

According to many, which is why both countries are stocking up recently so much gold.

See for yourself how hard Russia hoard gold. Below is an excerpt from a recent article Bloomberg …

When Vladimir Putin says U.S. endangers the global economy, the dollar monopoly abuse, it does not just talk. He makes this bet.

Putin has made Russia not only the world's largest oil producer, but also the largest buyer of gold. According to IMF data, compiled Bloomberg, its central bank has increased over the last decade its reserves by 570 tons of the metal, which is a quarter more than the other contestant — China.

And the rate of accumulation of gold in Russia last year, it seems, has only increased. According to one recent report, only one in 2012 Russia has added to its reserves of 3.2 million ounces.

But even more worrying is China. No one knows exactly how much gold China, because he does not apply, but all signs point to the fact that the storage of gold China is now rapidly. Here is what was said in the article on Zero Hedge few months ago …

Whereas before we were wondering (rhetorically, of course), what China is doing with all this excess positive trade balance, if not converts it back into Treasuries, now we again find that instead of buying U.S. securities , Beijing continues to buy gold in the form of non-US 68 tonnes imported in the month of June in Hong Kong. Since the beginning of the year (6 months) 383 tons. In other words, six months China — whose official total score in the game (to a large extent not reflected) is 1,054 tons — to import more gold than the official gold reserves of Portugal, Venezuela, Saudi Arabia, UK, etc., and the volume of only its imports from the beginning of the year is on the 14th place among the world's largest gold reserves. Really well, China has for years not to submit false information to the IMF to change their gold reserves, currently with certainty more gold than the IMF with its 2814 tons.

As I wrote before, no one has produced and does not import more gold than China.

Everyone agrees that China seems to have an insatiable thirst for the yellow metal, but here on the issue of how much he just gold, there is no unanimity. According to a recent estimate by the Chinese gold reserves to exceed 7,000 tons of gold, but this figure is not the limit.

So what can Russia and China?

In principle, the two countries have long complained about the fact that the U.S. dollar is the de facto currency of the world. Their leaders have allowed the adoption of a new global reserve currency, but until now the real contenders for the seat of the U.S. dollar did not appear.

So while the U.S. dollar remains the supreme power in the international trade. It is sad, but at least the majority of Americans strongly benefit from the petrodollar, the others are not even aware that it is.

But what would happen if the rest of the world would give up and took the petrodollar system would replace the system of "neftezolota"?

In a recent article, Jim Willie discusses how the system could work neftezolota …

The central element of non-dollar trading mechanism, conceived as an alternative to the U.S. dollar, gold will trade bonds. It will make possible the implementation of ad hoc payments by direct transfer from the account, regardless of the currency, and most importantly — they are holding tight passing routes and channels under the control of the bankers with their ubiquitous system of codes SWIFT, operating in the banking environment. Gold Trade bond will act much like a letter of credit, to serve as a short-term bills and perhaps even replace short-term U.S. Treasury bills with a near-zero rate of polluting the banking landscape. Any bond or promissory note, on which there is almost no interest — is sheer rubbish. Tied to zero U.S. Treasury securities offer a wide road to replace them more perfect mechanism. New trading bonds would imply the presence of gold, given as security, the entire system is designed for use in trade, will carry a solid gold core, which will also include silver and platinum, and maybe other precious metals. The idea is that as far as possible away from the systems FOREX,
away from the U.S. dollar and away from banks in the peer system that can work, allowing payments and transactions between the parties, the armed apparatus
Blackberry or simple PC. If the corrupt bankers will not notice the gold, it will be the center of a new trading system and a solution to the question of finding an acceptable alternative to the global U.S. dollar.

Both Russia and China large gain from the system neftezolota.

Russia is now the number one exporter of oil in the world.

China — the second largest oil consumer in the world, and in fact at the moment it imports from Saudi Arabia more oil than the United States.

Is there any meaning for him to remain trapped in a system that makes use of its U.S. dollars in all its operations with the oil?

Now Russia has still number one oil company in the world.

When it comes to energy, Russia and China have a lot trumps. What if they teamed up with the oil-producing countries in the Middle East, and decide to create a system in which the oil will be sold in exchange for the gold? Would not included in it bo? Most of the rest of the world?

Of course, if that happens, the U.S. financial system would collapse. In this case, we will not be able to export its inflation to the world, and prices will rise dramatically. Demand for U.S. government debt will fall through the floor, and the interest rates on this debt, and everything else in our economy soar. Economic activity will decay, and the financial markets — will collapse.

And it's only flowers.

Category: Hypotheses

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