Petro-dollar era is officially over as Gazprom begins sales in Yuan and Rouble

Petro-dollar era is officially over as Gazprom begins sales in Yuan and Rouble - National Finance Examiner | Examiner.com

From examiner.com:

The days of the dollar remaining the global reserve currency took a sharp hit today, and the ramifications of Russia's new move for selling oil in both Roubles and Yuan are just beginning. And since there is over $17 trillion in U.S. dollars afloat and in nations outside the U.S. kept on reserve for the primary purpose of buying oil and natural gas, as more and more countries migrate to the East and find it far more inexpensive and efficient to no longer use the dollar and SWIFT systems to supply their energy needs, then these dollars will soon come crashing back to American shores, and the inflation America has exported offshore for decades will come rudely back and suddenly hit U.S. consumers and our financial system.

Click to expand...

No idea if examiner.com is a reputable source. I didn't find this in any other news organization so far (haven't looked very hard, though).

What is people's opinion on this? Accurate? Really significant problem, or would the US economy absorb the hit more gradually and adapt?

So basically, what this will do is force the EU to buy up rubbles or yuans to pay gazprom.

That's it. Yes, we are talking about the #1 petrol and gaz exporter in the world not accepting dollars anymore for said things but what will that do?

a) it will probably cause the dollar to go down a bit. It won't cause it go crash, chill, but it will go down a bit in value, nothing to be worried about. And it will cause the rubble and the yuan to increase in value as various companies and countries are gonna start buying them up.
b) it will seriously make china very happy coz it can pay russia in it's own currency... that's like... a blessing. And it will cause the russian ruble to gain a bit of value too and that will have short term beneficial impacts for the russian country, not so much for the russians who are poor.. it will make the russians who are rich very happy... and that's it.

So don't worry, it's not that big a deal.

GreatNews2night said:

Petro-dollar era is officially over as Gazprom begins sales in Yuan and Rouble - National Finance Examiner | Examiner.com

From examiner.com:



No idea if examiner.com is a reputable source. I didn't find this in any other news organization so far (haven't looked very hard, though).

What is people's opinion on this?

Click to expand...

Accurate? Really significant problem, or would the US economy absorb the hit more gradually and adapt?

Click to expand...

I just checked and right now the U.S. Dollar is going up.

GreatNews2night said:

Petro-dollar era is officially over as Gazprom begins sales in Yuan and Rouble - National Finance Examiner | Examiner.com

From examiner.com:



No idea if examiner.com is a reputable source. I didn't find this in any other news organization so far (haven't looked very hard, though).

What is people's opinion on this? Accurate? Really significant problem, or would the US economy absorb the hit more gradually and adapt?

Click to expand...

Russia

http://www.ibtimes.com/russian-ener...s-dollars-its-arctic-oil-exports-amid-1672302

http://www.eurasiareview.com/28082014-gazprom-begins-selling-oil-rubles-yuan/

Yawn.

Russia seems perfectly happy to telegraph that it is just as willing to use barter (and "heaven forbid" gold) and shortly other "regional" currencies, as it is to use the US Dollar, hardly the intended outcome of the western blocakde, which appears to have just backfired and further impacted the untouchable status of the Petrodollar.

http://www.zerohedge.com/news/2014-04-04/us-threatens-russia-sanctions-over-petrodollar-busting-deal

Last week, Russia held an economic summit in St. Petersburg. CNBC reports that the main focus of the event was to further improve Russia’s trade relationship with China. Moscow’s budding friendship with its neighbor to the east is a major step towards Russia’s plan for the de-dollarization of the world.

http://www.sbcgold.com/blog/russia-china-deals-will-affect-dollar/

Rainman05 said:

So basically, what this will do is force the EU to buy up rubbles or yuans to pay gazprom.

That's it. Yes, we are talking about the #1 petrol and gaz exporter in the world not accepting dollars anymore for said things but what will that do?

a) it will probably cause the dollar to go down a bit. It won't cause it go crash, chill, but it will go down a bit in value, nothing to be worried about. And it will cause the rubble and the yuan to increase in value as various companies and countries are gonna start buying them up.
b) it will seriously make china very happy coz it can pay russia in it's own currency... that's like... a blessing. And it will cause the russian ruble to gain a bit of value too and that will have short term beneficial impacts for the russian country, not so much for the russians who are poor.. it will make the russians who are rich very happy... and that's it.

So don't worry, it's not that big a deal

Click to expand...

Really? But what about this part?

Then these dollars will soon come crashing back to American shores, and the inflation America has exported offshore for decades will come rudely back and suddenly hit U.S. consumers and our financial system.

Montecresto said:

Russia

Russian Energy Giant Gazprom Wants Rubles, Not US Dollars, For Its Arctic Oil Exports Amid Western Sanctions

Gazprom Begins Selling Oil In Rubles And Yuan - Eurasia Review

Click to expand...

OK, so it is true. Now, what will the impact be, for the US economy and the dollar? People who are saying it's not a big deal are forgetting about this part of one of your articles above quoted (I take it seriously, and I'm apprehensive).

The US dollar's position as the base currency for global energy trading gives the US a number of unfair advantages. It seems that Moscow is ready to take those advantages away.

The existence of “petrodollars” is one of the pillars of America's economic might because it creates a significant external demand for American currency, allowing the US to accumulate enormous debts without defaulting. If a Japanese buyer want to buy a barrel of Saudi oil, he has to pay in dollars even if no American oil company ever touches the said barrel. Dollar has held a dominant position in global trading for such a long time that even Gazprom's natural gas contracts for Europe are priced and paid for in US dollars. Until recently, a significant part of EU-China trade had been priced in dollars.

Lately, China has led the BRICS efforts to dislodge the dollar from its position as the main global currency, but the “sanctions war” between Washington and Moscow gave an impetus to the long-awaited scheme to launch the petroruble and switch all Russian energy exports away from the US currency .

Click to expand...

And also this, from your second article:

While neither of these deals have had a direct impact on the U.S. dollar, analysts are beginning to wonder about what this could mean for the United States economy down the road. The dollar is strengthened by its status as the world’s reserve currency, allowing the U.S. to borrow nearly unlimited amounts of money since there is always a huge demand for its currency. A downgrade in the global status of the dollar would force the United States to stop living beyond its means, which could lead to major government cut backs and possibly multiple defaults.

Click to expand...

So, how come people are so nonchalant about this? This could be a major blow to the United States.

GreatNews2night said:

OK, so it is true. Now, what will the impact be, for the US economy and the dollar? People who are saying it's not a big deal are forgetting about this part of one of your articles above quoted (I take it seriously, and I'm apprehensive).



And also this, from your second article:



So, how come people are so nonchalant about this? This could be a major blow to the United States.

Click to expand...

Well, that's a very good question. Obviously I'm not, that's why I helped you with those links. I just can't figure out the risks we are taking with Russia, over the Ukraine, and particularly because Russia is desperate to resist, and apparently at all cost, NATO expansion eastward! And from my chair, quite understandably.

GreatNews2night said:

OK, so it is true. Now, what will the impact be, for the US economy and the dollar? People who are saying it's not a big deal are forgetting about this part of one of your articles above quoted (I take it seriously, and I'm apprehensive).



And also this, from your second article:



So, how come people are so nonchalant about this? This could be a major blow to the United States.

Click to expand...

Because it isn't a major blow to the US and it's a minor news story. It's a protective measure because of the sanctions regime.

Sherman123 said:

Because it isn't a major blow to the US and it's a minor news story. It's a protective measure because of the sanctions regime.

Click to expand...

Ok, that's a nice opinion, and there's posted here opinions of some in the financial sector that have a different opinion. Guess we'll see, and hope in the meantime that you're the correct one.

Montecresto said:

Well, that's a very good question. Obviously I'm not, that's why I helped you with those links. I just can't figure out the risks we are taking with Russia, over the Ukraine, and particularly because Russia is desperate to resist, and apparently at all cost, NATO expansion eastward! And from my chair, quite understandably.

Click to expand...

Right. In my opinion, what we should have said to Putin from the beginning is:

"Buddy, Ukraine is your backyard. Your problem. A basket case. A mess. Ethnic strife, neo-Nazis, rotten economy... The Pottery Barn rule: you break it, you own it. Good riddance. The West has nothing to gain from Ukraine. You want to annex it, be my guest. You may regret it later because it is no good; you'll be inheriting a bunch of problems, massive unemployment, failed state. I mean, you still want to invade, annex? Do as you please in your own backyard. Don't mess with NATO territory, though; that's a line you can't cross; on the other hand, we should probably stop expanding eastward. Let's be nice to each other, keep the status quo, continue to trade and prosper."

Period.

Why in the hell are we risking the status of the petrodollar over Ukraine???? We have much bigger fish to fry than Ukraine. We shouldn't have engaged in any sanctions against Russia. We should have treated this from the beginning as a regional conflict that is not our problem.

What is wrong with our administration? It's a very confused approach to foreign policy.

Let's just leave Russia alone.

There's been no more detrimental move in terms of geopolitical equilibrium, than NATO's eastward expansion. It helps some businessmen who have trade interests in Eastern Europe (which is why it was done). It screws everybody else, and destabilizes Europe.

Sherman123 said:

Because it isn't a major blow to the US and it's a minor news story. It's a protective measure because of the sanctions regime.

Click to expand...

If if stays this way, sure.

However if the BRICS move away from petrodollars, other countries follow their lead, the Saudis get tired of the US and approach China, and so on and so forth, we're screwed. You are thinking short term and small picture. I'm apprehensive for the mid-long term and big picture.

I think there is reason to be concerned, and I definitely don't like where this is going.

GreatNews2night said:

If if stays this way, sure.

However if the BRICS move away from petrodollars, other countries follow their lead, the Saudis get tired of the US and approach China, and so on and so forth, we're screwed. You are thinking short term and small picture. I'm apprehensive for the mid-long term and big picture.

I think there is reason to be concerned, and I definitely don't like where this is going.

Click to expand...

Uh-huh. When the fundamental characteristics of the global monetary system change (which is basically what you're saying) I'll take notice. No one cares about this. The dollar closed up by the way.

GreatNews2night said:

Really? But what about this part?

Then these dollars will soon come crashing back to American shores, and the inflation America has exported offshore for decades will come rudely back and suddenly hit U.S. consumers and our financial system.

Click to expand...

No.

It's not that straight-forward.

And it's not like montecresto says, like Russia has this master-plan to get rid of the dollar as the worlds' reserve currency.
The reason the dollar is used as a reserve currency has nothing to do with petrol. It's because it's a currency of a steady value (that's why it's important to not default on the debt, or not have clowns in congress who threaten the steadyness of the dollar) and because a lot of countries and a lot of people like to have dollars coz they're traded everywhere. So if you go all over the world on holiday, you should take dollars with you coz every single exchange house or bank will exchange dollars for the local currency. So that's like, on an individual level. On a macro-level, national banks in many countries hold dollars or euros as currency in the bank. And because wall street trades in dollars... as do many other places... etc.

So no, don't worry, this isn't that big a deal.

GreatNews2night said:

Right. In my opinion, what we should have said to Putin from the beginning is:

"Buddy, Ukraine is your backyard. Your problem. A basket case. A mess. Ethnic strife, neo-Nazis, rotten economy... The Pottery Barn rule: you break it, you own it. Good riddance. The West has nothing to gain from Ukraine. You want to annex it, be my guest. You may regret it later because it is no good; you'll be inheriting a bunch of problems, massive unemployment, failed state. I mean, you still want to invade, annex? Do as you please in your own backyard. Don't mess with NATO territory, though; that's a line you can't cross; on the other hand, we should probably stop expanding eastward. Let's be nice to each other, keep the status quo, continue to trade and prosper."

Period.

Why in the hell are we risking the status of the petrodollar over Ukraine???? We have much bigger fish to fry than Ukraine. We shouldn't have engaged in any sanctions against Russia. We should have treated this from the beginning as a regional conflict that is not our problem.

What is wrong with our administration? It's a very confused approach to foreign policy.

Let's just leave Russia alone.

There's been no more detrimental move in terms of geopolitical equilibrium, than NATO's eastward expansion. It helps some businessmen who have trade interests in Eastern Europe (which is why it was done). It screws everybody else, and destabilizes Europe.

Click to expand...

...

You don't understand anything.

'Russia Touches U.S. Achilles Heel: Petrogold instead of petrodollar

The US government feels the need to intervene in the Russian issue with Ukraine. If it wasn’t for an economic reason, nobody could come up with a valid argument explaining what the US has to do with a former USSR geopolitical issue. Is it really true that US policy makers leverage these “opportunities” as they desperately seek for GDP growth which they can’t find elsewhere?

Today’s Russia is not governed by an alcohol addict named Jeltsin. Putin, with his roots in the KGB, clearly does not feel any intimidation by the US cabal. By contrast, his answer to the US warnings goes straight to the Achilles heel of the US: the US Dollar based global oil system, also known as “Petrodollar.”

However, like with the Syrian crisis of last September, Russia is quickly retaliating with their own economic threats, and one major action that they could undertake as a response is to discard the Petro-Dollar and demand physical gold as payment for energy purchases in both oil and natural gas.

'Russia Touches U.S. Achilles Heel: Petrogold instead of Petrodollar' - Daily Mail Forum | Mail Online

Rainman05 said:

...

You don't understand anything.

Click to expand...

Really? Enlighten me, then, please. What is the explanation that is alternative to mine and explains (understands) everything?

shrubnose said:

I just checked and right now the U.S. Dollar is going up.

Click to expand...

1-day movement is not indicative of mid-term and long-term.

Rainman05 said:

...

You don't understand anything.

Click to expand...

Riiiiight...he doesn't 'understand anything'.

He doesn't understand English or how to work a computer/tablet/smartphone or what Russia is or who Putin is or what the petrodollar is or what gold is or....

:roll:

GreatNews2night said:

Right. In my opinion, what we should have said to Putin from the beginning is:

"Buddy, Ukraine is your backyard. Your problem. A basket case. A mess. Ethnic strife, neo-Nazis, rotten economy... The Pottery Barn rule: you break it, you own it. Good riddance. The West has nothing to gain from Ukraine. You want to annex it, be my guest. You may regret it later because it is no good; you'll be inheriting a bunch of problems, massive unemployment, failed state. I mean, you still want to invade, annex? Do as you please in your own backyard. Don't mess with NATO territory, though; that's a line you can't cross; on the other hand, we should probably stop expanding eastward. Let's be nice to each other, keep the status quo, continue to trade and prosper."

Period.

Why in the hell are we risking the status of the petrodollar over Ukraine???? We have much bigger fish to fry than Ukraine. We shouldn't have engaged in any sanctions against Russia. We should have treated this from the beginning as a regional conflict that is not our problem.

What is wrong with our administration? It's a very confused approach to foreign policy.

Let's just leave Russia alone.

There's been no more detrimental move in terms of geopolitical equilibrium, than NATO's eastward expansion. It helps some businessmen who have trade interests in Eastern Europe (which is why it was done). It screws everybody else, and destabilizes Europe.

Click to expand...

I agree somewhat with the whole post but especially with the highlighted part.


Personally, I think the government has gotten 'Sanction fever'. They just cannot get enough of it as they see it as a no lose way of getting a message across.

But Russia is not Cuba or Iran.

They are the 2'nd largest exporter of oil and the largest exporter of natural gas in the world. Plus, America is not the all-powerful economy it used to be.

Also the petrodollar (and the greenback's reserve currency status) are INCREDIBLY important to the U.S. government/Fed. Lose those and the ability of the gov't./Fed to just 'print' their problems away gets MUCH more problematic.
The government should not, IMO, take this status for granted.

And next to Saudi Arabia and possibly China, no single country in the world has the ability to hurt the petrodollar more then Russia.

This is a game of chicken the Administration is playing that they probably won't lose...but they could get a lot more injured then they seem to be acting.

GreatNews2night said:

1-day movement is not indicative of mid-term and long-term.

Click to expand...

Click to expand...

Do you have any other brilliant comments?

We are waiting for for your sage advice. :roll:

I might have said: "Yawn", but it's already been said.

"If you watch where you're walking, you might not step in a hole."

shrubnose said:

Do you have any other brilliant comments?

We are waiting for for your sage advice. :roll:

I might have said: "Yawn", but it's already been said.

"If you watch where you're walking, you might not step in a hole."

Click to expand...

Come on now...your original comment was nothing amazing either.

The dollar is up today?

He merely stated a fact in reply to your post.

DA60 said:

Come on now...your original comment was nothing amazing either.

The dollar is up today?

He merely stated a fact in reply to your post.

Click to expand...

Click to expand...

I noticed that and I also noticed a long time ago that's what's high today may be low tomorrow.

But I never thought that was earth-shaking news.

Some people spend a big part of their life wasting other people's time with BS.

But life goes on and the world doesn't stop turning.

Did you ever notice that?

shrubnose said:

I noticed that and I also noticed a long time ago that's what's high today may be low tomorrow.

But I never thought that was earth-shaking news.

Some people spend a big part of their life wasting other people's time with BS.

But life goes on and the world doesn't stop turning.

Did you ever notice that?

Click to expand...

I hear ya shrub, and you have a point that no one need panic. But the blossoming Chinese/Russian partnership can't be ignored, and the topic of this op is but one aspect of it.

Cooperation with China is extremely important to Russia's international interests. China shares Russia's vision of a future multipolar world structure. In practical terms, that means both countries would like to see a world that is not dominated by only a single power, but one marked by cooperation between several centers of influence and guided by international law and the charter of the United Nations. Behind the ideal of a multipolar world an obvious reality lies hidden: Russia and China, as well as several other states, are large enough to have their own interests and their own approaches to the issues of regional and global development. They are not satisfied with a world order completely dominated by a single major power that does not take their interests into account. However, they are fully content with the post-World War II world structure with its system of international law in which the U.N. Security Council is the highest authority. Their status as permanent members of the Security Council places them on equal standing with the United States – a state that in every other respect is more powerful therefore naturally trying to alter the system that is fettering its possibilities.


Read more here.

http://www.foreignaffairs.com/articles/65230/stephen-kotkin/the-unbalanced-triangle


And a multipolar world is better than a unipolar world, even if the unipolar power is the US.