Dalek News 10 JUNE 2022

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Thoughts on the Petrodollar from around the world.

In addition to nearly all oil sales, the US dollar is used for about 80% of all international transactions.
This gives the US unmatched geopolitical power.
The US can sanction or exclude virtually any country from the US dollar-based financial system at the flip of a switch.
By extension, it can also cut off any country from most international trade. And that would be a financial kiss of death. This creates a powerful incentive for governments to stay in Washington’s good graces.
The petrodollar system is why people and businesses worldwide take US dollars. They have had little choice but to accept this.

However:
Saudi Arabia is flirting in the open with China about pricing oil in yuan. It signals an imminent and enormous change for anyone holding US dollars. It would be incredibly foolish to ignore this giant red warning sign.

As China is as much a Eurasian power as Russia, they need to coordinate their strategies to bypass the us unipolar system.

The Eurasian system will be based on “a new international currency,” most probably with the yuan as reference, calculated as an index of the national currencies of the participating countries, as well as commodity prices.

The Eurasian system is bound to become a serious alternative to the US dollar, as the EAEU may attract not only nations that have joined… but also the leading players in the shanghai cooperation organization (SCO) as well as ASEAN. West Asian actors – Iran, Iraq, Syria, Lebanon – will be inevitably interested.

Michael Hudson is of the opinion that:

“This monetary privilege – dollar seignorage – has enabled U.S. diplomacy to impose neoliberal policies on the rest of the world, without having to use much military force of its own except to grab Near Eastern oil

But the effect of making the Russian dollar, sterling and euro holdings hostage has been to make the
City of London too risky a venue in which to hold their assets. For Russian billionaires,
their own country is starting to look safest.

How will India and Saudi Arabia view their dollar holdings as Biden and Blinken try to strong-arm them into following the U.S. “rules-based order” instead of their own national self-interest?

These consequences cannot really be deemed “unintended.” Too many observers have pointed out exactly what would happen – headed by President Putin and Foreign Secretary Lavrov explaining just what their response would be if NATO insisted in backing them into a corner while attacking Eastern Ukrainian Russian-speakers and moving heavy weaponry to Russia’s Western border. The consequences were anticipated. The neocons in control of U.S. foreign policy simply didn’t care.

Trying to force Russia to respond militarily and thereby looking bad to the rest of the world is turning out to be a stunt aimed simply at demonstrating Europe’s need to contribute more to NATO, buy more U.S. military hardware and lock itself deeper into trade and monetary dependence on the United States.”

De-dollarization has been going on for a while.

Using OPEC data, in 2045 rising oil consumption of China will equal the declining oil consumption of the USA. In terms of the land blocks of China plus India plus Russia, versus the oceanic blocks of America plus Europe, equalization day will be some time in 2037, after which China, India Russia will consume more oil. Using the OPEC forecasts, it would seem in terms of consumption that the Petrodollar is safe for a decade.

References
Petrodollar System Flirts With Collapse… What It Means for Gold, Oil, and the Dollar
Nick Giambruno
https://internationalman.com/articles/petrodollar-system-flirts-with-collapse-what-it-means-for-gold-oil-and-the-dollar/

The Waning Supremacy of the Petrodollar Economy
Syed Zain Abbas Rizvi
https://moderndiplomacy.eu/2022/05/28/the-waning-supremacy-of-the-petrodollar-economy/

The Rise And Fall Of The PetroDollar
Johanna Anim Caviezel
https://www.citizensjournal.us/petrodollar-system-flirts-with-collapse-what-it-means-for-gold-oil-and-the-dollar/

Michael Hudson
“The American Empire Self-destructs”