China may put an end to the reign of the petrodollar

scatterStorm

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Are you smoking crack ? Yuan parity with the US Dollar, 1 for 1 ?
Do you know what that means - right now 1 USD = 6.25 Yuan, so that means the Yuan appreciates by 600% or the US Dollar depreciates to 1/6 its value. That's crazy........that means an iPhone costing $800 bucks now will cost $4800 by 2019.

Even if you are talking about parity in other terms - sure China will try to buy oil with their currency.
But that does not mean that anyone is going to keep huge forex reserves in Yuan, because if the Chinese Finance Czar wakes up one day and decides to devalue the Yuan to make exports cheaper - then anyone holding Chinese Yuan is screwed.
Ok I went a little overboard with the parity one, you are right, my bad, I saw the model again, I forgot the time-horizon, yes not happening very soon, but I am certain though, that with the speed and momentum the $ against Yuan is going, we might see the next big dip at the end of 2019 or during first financial quarter of 2020.

 

badguy2000

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there is no is such "dictatorship" co~ruled by "7 key individuals".

one dictator itself is the antonym to "7 key individuals".

when rome was ruled by two "key indivduals"(praetorians),rome was called "republic"

so, technically,you can have either "a dictator" or "7 key individuals" ,but you can not have a dictator and "7 key individuals" at the same time.


The point is do you want to deal with a world reserve currency from a country with transparent and independent Federal Reserve, or do you want to deal with a reserve currency from a country where there is absolutely no transparency, and where the federal monetary policy and exchange rates are all controlled by the government, companies account books are routinely cooked, and economic statistics are fabricated.

A lot of people on this forum dont realize that literally every single policy in China about anything of significance is made by a committee of 7 key individuals of the CCP standing Politburo, and rubber-stamped without any debate by the CCP rank & file. That's China for you. It is the biggest dictatorship in the world right now. Not even Russia compares to it.

Who is going to be crazy enough to want currency from a system like that to be the world's reserve currency ??

Maybe a better question is: As a country, are you going to hold billions of dollars of forex reserves in Chinese currency when you dont even how how they are going to determine the exchange rates for the yuan.
 
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no smoking

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Please tell me in which of the articles saying that Chinese requires yuan EXCLUSIVELY?
Chinese won't and CAN'T reject other foreign currency payment with these trading partners.
 

amoy

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What will China pay for LNG or crude, DOLLOR or YUAN? I'm all for a further integration / mutual dependence for the two TOP economies!


U.S. Commerce Secretary to China: Import more U.S. gas to cut trade gap

China needs to import very, very large amounts of LNG and from their point it would be very logical to import more of it from us, if for no reason other than to diversify their sources of supply,” Ross said. “It would also have the side effect of reducing the deficit.”

Though LNG imports may help the deficit, which reached $375 billion last year, they are unlikely to put a big dent in it, Anastacia Dialynas, analyst at Bloomberg New Energy Finance, said in a research note. Chinese LNG imports may grow to 82 million tons by 2030; if the country bought all of that from the U.S., it could contribute almost $28 billion to the trade balance.

China is already the third-biggest importer of U.S. LNG, behind only Mexico and South Korea. In February, Cheniere Energy became the first U.S. gas exporter to sign a long-term deal with China, agreeing to supply China National Petroleum with 1.2 million metric tons a year through 2043.
 

amoy

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the latest twist in a dramatic turn of events
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China tariffs on US oil would disrupt $1 billion monthly business

Singapore: China’s threat to impose duties on US oil imports will hit a business that has soared in the last two years, and which is now worth almost $1 billion (Dh3.67 billion) per month.

In an escalating spat over the United States’ trade deficit with most of its major trading partners, including China, US President Donald Trump said last week he was pushing ahead with hefty tariffs on $50 billion of Chinese imports, starting on July 6.


China said on Friday it would retaliate by slapping duties on several American commodities, including oil.

Investors expect the spat to come at the expense of US oil firms, pulling down the share prices of ExxonMobil and Chevron by 1 to 2 per cent since Friday, while US crude oil prices fell by around 5 per cent.

“This escalation of the trade war is dangerous for oil prices,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.
 
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Saudi Arabia Considers Accepting Yuan Instead of Dollars for Chinese Oil Sales

Visiting this thread after a long time. Seems like lot of this is starting to happen which will be
the worst thing for the dollar.
 
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