Another Step towards The Collapse of The Petrodollar
The comments below are an edited and abridged synopsis of an article by Tyler Durden
For the past 18 months, the new Chinese oil futures contract settled/priced in yuan has been news. China directly challenging the US dollar is a significant change. The new futures oil contract is the next step in China moving completely away from the dollar and the world reserve currency system, and towards a multipolar world with several currencies being used for international trade.
While China pursued currency swaps as far back as 1997, during the Asian financial crisis, none of the agreements were activated. That changed with the global financial meltdown in 2008. China began pursuing and instituting direct currency swaps and opened Renminbi Clearing Centers around the world, including Canada, the backyard of the US.
Beyond the progress in Asian regional financial cooperation, China has signed swap agreements with about 30 countries since 2008. The People’s Bank of China (PBOC) stated that those swap agreements were intended not only to stabilize the international financial market, but also to facilitate bilateral trade and investment.
China, along with other nations, is ready for this system to change and balance the economic scale. When you announce to the world that your currency is someone else’s problem, the people usually find a way to fix the problem and eliminate the situation creating the problem.
China, along with Russia, understands this scenario all too well. These two nations, along with 30+ other nations, are making moves to be rid of the US dollar.
Once this is corrected, the US economy will change dramatically. Inflation and hyperinflation will rain down on the US economy like never before. The only hope is that a major war doesn’t manifest to announce the coming change in the global monetary system.