"It appears that the moment has now come for the GCC members to embrace this reality, to expel US military forces from the region, and to sell down their dollars and underlying assets."
The petrodollar era is over. The US has debased the dollar since WWII and now at an accellerating rate in order to "fund" its uncontrollable spending. Either this stops or the US and its dollar constituents will suffer hyperinflation on the scale of Weimar Germany in 1923.
It's as bad as that. But Austrian economists knew this was the end game for the dollar as it has been for fiat money throughout history. China did not "wage financial war" on the US and the dollar, as many like to say. It merely recongnized the destructive path of the fiat dollar and protected itself and its allies by accumulating gold in order to place its currency on a gold standard at the point of dollar collapse. (I'm merely encapsulating what Alasdair has been teaching us for a long, long time.)
Leon Liao makes a very good point about a steady growth of the Yuan over time as an alternative to the dollar. I would add that there is speculation of a move to a basket of currencies and also the observation that wars and sanctions introduced by America and the west accelerates the Yuan's uptake. It does not replace the dollar America will be a serious presence on the world's stage for a long time. How will the rest of the world manage America's relative decline?
I don't have a mobile phone for health reasons, sanity being one of them :-) I am happy to do email (password encrypted if necessary) on ntkp_admin@proton.me
The interesting part here isn’t the headline claim, it’s the mechanism being suggested underneath it. If oil flows start settling in yuan even at the margin, that’s not a sudden overthrow of the dollar. It’s a slow erosion of habit. And habit is what reserve systems are built on.
Currency regimes don’t break like companies. They fade. First in bilateral trade, then in specific regions, then in moments of stress where participants choose flexibility over tradition. The dollar doesn’t need to disappear for its influence to shrink. It just needs to be used slightly less each time there’s an alternative.
The part I’d be careful with is the timeline. These transitions tend to take far longer than the narrative suggests, even when the direction is right. But the signal is real. When settlement terms start shifting at the commodity level, you’re no longer talking about theory. You’re watching the plumbing of the system slowly get rerouted.
To be frank, some of the recent discussions about the petroyuan, and even about the decline of dollar hegemony, have significantly overstated China’s current international financial influence while understating the sheer strength of U.S. dollar dominance. China may be an industrial giant, but its financial power remains comparatively weak. That said, these debates do reflect a deeper layer of American anxiety. Egon von Greyerz’s article is a good example of that anxiety.
In my view, the direction of that anxiety is broadly understandable, but once it is quickly extrapolated into the claim that such an outcome is close at hand, it starts to overestimate China by a considerable margin.
Although the PBOC has continued to add to its gold holdings in recent years, the pace has actually been quite slow: over the past decade, China’s official gold reserves have increased by only about 25%. Moreover, as of now, China’s central bank gold holdings are only about 28% of U.S. official gold reserves. There is still no official signal whatsoever suggesting that China is preparing to make the renminbi formally convertible into gold.
More importantly, for the renminbi to become a much more important reserve and settlement currency, depth, liquidity, freedom of capital movement, and predictability in the capital account matter far more than how much gold sits behind it. As the IMF has pointed out, the main constraints on the renminbi’s international share remain capital account management, market depth, and limited usability, not insufficient gold reserves.
As for the so-called petroyuan, its impact remains marginal for now. One should not take the phenomenon of using renminbi or other non-dollar means of payment for transit or settlement during the Hormuz crisis and immediately elevate it into a claim that the petrodollar is coming to an end.What we are seeing is better understood as a coercive, temporary, and highly geopolitical payment arrangement under crisis conditions, not a voluntary, stable, and institutionalized shift by the Gulf oil producers to settle crude exports in renminbi.
In the end, renminbi internationalization will be an extremely slow historical process. The most likely path is a gradual rise in its share within China-linked trade networks, among sanctioned states, along higher-risk energy routes, and among countries that have become more cautious about excessive dependence on the dollar. What is far less likely is an overnight emergence of a newly announced, gold-anchored monetary order that fully replaces the dollar.
The dollar will suffer the fate of all fiat currencies. The war on Iran has accelerated its destruction. Honest money is essential to a functioning, civilized society. It is the key to the escape from a barter economy. Without a sound medium of exchange economies and societies collapse. Such was the fate of the Roman Empire, for example.
The decline of the Dollar will be gradual , as the means to bypass it with alternative direct currency payment systems between nations of the type now used by both Russia and China gain acceptance. Both countries systems came about by the need to trade without sanction interference by the U.S. and its allies. China has a domestic market 5 times the size of the US. Achievieng financial parity is a question of time. A long time maybe but inevitable.
A true master-class in international finance and geo-politics - and the quite mind numbing consequences that Trump & Netanyahu's most recent and " in Ya Face " attempts at regime' change & the destruction of an entirely passive ( up to now ) nation state will have for the rest of humanity.
Must agree that the ' U.S. arse kissers ' and vassel state toadies who make up the members of the GCC have been handed a powerfully rude awakerning and long overdue wake up call as to the uselessness of ' Uncle Sam ' in terms of strategy , military competence , and over-hyped and outdated kit - to be able to defendany of the ' Gulf Poodles ' against anything what so ever .
Time for the Kings , Princes & Sheikh's of ' Greater Arabia ' to finally wake up and smell the coffee such that it brings to them the realisation that if they are to have any future what so ever , they must kick the U.S. Hegemon and it's Zionist puppet masters into the gutter ( where they belong ) once and for all & keep everything crossed that China / Russia & Iran ( not sure about BRICS ) will park all of the deceipt & double dealing of the past and allow them to conjoin to form the foundations of a true multi-polar World . It 's the only sensible way forward ...Everything Crossed .
QUESTION : Given this ' New ' war - what is the current and ongoing status going to be of the scheduled SGE / SGE Gold warehousing facility in Saudi Arabia and the mooted one in the UAE .
I can't imagine that the Chinese ( anyone ) would allow any of their physical metal to be stored
in any other nation if it wasn;t essentially under their or Russian protection - and with no future meddling from ' Uncle Sam ' . ALSO & as regards the actual tonnage of Gold held by the Chines , you have mentiioned 35 - 35,000 x tonnes ( may be more ) & others have opined thast all in it could easilly be 70,000 tonnes + .. so when do you imagine that they will feel it may finally be the right time to reveal all and to put an end to the FIAT system for good ..??
The word 'Proxy' is a misdirection. The simple truth is that Russia invaded Ukraine for purely territorial gain (think Czar Peter and Czarina Catherine II empires) and Iran has been at war against the west for 47 years, particularly Israel, out of pure hatred of Israel and her supporters.
Ronald - In this comment , you are infact describing the incredulity that everyone else feels having read your drivel - and are in fact noting what we all feel having been subjected what ever nonsense you manage to manufacture in your tiny mind
Exactly - but you can almost guarentee that he'll not take the hint and will instead just double down on his ignorance ......" Stupid is as Stupid does " & all that
As Patrick has noted below - " You are wrong on both counts " - which is only to be expected as you always tend to be wrong and out of touch on everytghing you ever pass comment on .There's a pattern here and you are acting true to form ( try NOT to keep it up )
"It appears that the moment has now come for the GCC members to embrace this reality, to expel US military forces from the region, and to sell down their dollars and underlying assets."
The petrodollar era is over. The US has debased the dollar since WWII and now at an accellerating rate in order to "fund" its uncontrollable spending. Either this stops or the US and its dollar constituents will suffer hyperinflation on the scale of Weimar Germany in 1923.
It's as bad as that. But Austrian economists knew this was the end game for the dollar as it has been for fiat money throughout history. China did not "wage financial war" on the US and the dollar, as many like to say. It merely recongnized the destructive path of the fiat dollar and protected itself and its allies by accumulating gold in order to place its currency on a gold standard at the point of dollar collapse. (I'm merely encapsulating what Alasdair has been teaching us for a long, long time.)
Totally agree on all points
Leon Liao makes a very good point about a steady growth of the Yuan over time as an alternative to the dollar. I would add that there is speculation of a move to a basket of currencies and also the observation that wars and sanctions introduced by America and the west accelerates the Yuan's uptake. It does not replace the dollar America will be a serious presence on the world's stage for a long time. How will the rest of the world manage America's relative decline?
I don't have a mobile phone for health reasons, sanity being one of them :-) I am happy to do email (password encrypted if necessary) on ntkp_admin@proton.me
The interesting part here isn’t the headline claim, it’s the mechanism being suggested underneath it. If oil flows start settling in yuan even at the margin, that’s not a sudden overthrow of the dollar. It’s a slow erosion of habit. And habit is what reserve systems are built on.
Currency regimes don’t break like companies. They fade. First in bilateral trade, then in specific regions, then in moments of stress where participants choose flexibility over tradition. The dollar doesn’t need to disappear for its influence to shrink. It just needs to be used slightly less each time there’s an alternative.
The part I’d be careful with is the timeline. These transitions tend to take far longer than the narrative suggests, even when the direction is right. But the signal is real. When settlement terms start shifting at the commodity level, you’re no longer talking about theory. You’re watching the plumbing of the system slowly get rerouted.
To be frank, some of the recent discussions about the petroyuan, and even about the decline of dollar hegemony, have significantly overstated China’s current international financial influence while understating the sheer strength of U.S. dollar dominance. China may be an industrial giant, but its financial power remains comparatively weak. That said, these debates do reflect a deeper layer of American anxiety. Egon von Greyerz’s article is a good example of that anxiety.
In my view, the direction of that anxiety is broadly understandable, but once it is quickly extrapolated into the claim that such an outcome is close at hand, it starts to overestimate China by a considerable margin.
Although the PBOC has continued to add to its gold holdings in recent years, the pace has actually been quite slow: over the past decade, China’s official gold reserves have increased by only about 25%. Moreover, as of now, China’s central bank gold holdings are only about 28% of U.S. official gold reserves. There is still no official signal whatsoever suggesting that China is preparing to make the renminbi formally convertible into gold.
More importantly, for the renminbi to become a much more important reserve and settlement currency, depth, liquidity, freedom of capital movement, and predictability in the capital account matter far more than how much gold sits behind it. As the IMF has pointed out, the main constraints on the renminbi’s international share remain capital account management, market depth, and limited usability, not insufficient gold reserves.
As for the so-called petroyuan, its impact remains marginal for now. One should not take the phenomenon of using renminbi or other non-dollar means of payment for transit or settlement during the Hormuz crisis and immediately elevate it into a claim that the petrodollar is coming to an end.What we are seeing is better understood as a coercive, temporary, and highly geopolitical payment arrangement under crisis conditions, not a voluntary, stable, and institutionalized shift by the Gulf oil producers to settle crude exports in renminbi.
In the end, renminbi internationalization will be an extremely slow historical process. The most likely path is a gradual rise in its share within China-linked trade networks, among sanctioned states, along higher-risk energy routes, and among countries that have become more cautious about excessive dependence on the dollar. What is far less likely is an overnight emergence of a newly announced, gold-anchored monetary order that fully replaces the dollar.
The dollar will suffer the fate of all fiat currencies. The war on Iran has accelerated its destruction. Honest money is essential to a functioning, civilized society. It is the key to the escape from a barter economy. Without a sound medium of exchange economies and societies collapse. Such was the fate of the Roman Empire, for example.
Right Again ...!!
The decline of the Dollar will be gradual , as the means to bypass it with alternative direct currency payment systems between nations of the type now used by both Russia and China gain acceptance. Both countries systems came about by the need to trade without sanction interference by the U.S. and its allies. China has a domestic market 5 times the size of the US. Achievieng financial parity is a question of time. A long time maybe but inevitable.
A true master-class in international finance and geo-politics - and the quite mind numbing consequences that Trump & Netanyahu's most recent and " in Ya Face " attempts at regime' change & the destruction of an entirely passive ( up to now ) nation state will have for the rest of humanity.
Must agree that the ' U.S. arse kissers ' and vassel state toadies who make up the members of the GCC have been handed a powerfully rude awakerning and long overdue wake up call as to the uselessness of ' Uncle Sam ' in terms of strategy , military competence , and over-hyped and outdated kit - to be able to defendany of the ' Gulf Poodles ' against anything what so ever .
Time for the Kings , Princes & Sheikh's of ' Greater Arabia ' to finally wake up and smell the coffee such that it brings to them the realisation that if they are to have any future what so ever , they must kick the U.S. Hegemon and it's Zionist puppet masters into the gutter ( where they belong ) once and for all & keep everything crossed that China / Russia & Iran ( not sure about BRICS ) will park all of the deceipt & double dealing of the past and allow them to conjoin to form the foundations of a true multi-polar World . It 's the only sensible way forward ...Everything Crossed .
QUESTION : Given this ' New ' war - what is the current and ongoing status going to be of the scheduled SGE / SGE Gold warehousing facility in Saudi Arabia and the mooted one in the UAE .
I can't imagine that the Chinese ( anyone ) would allow any of their physical metal to be stored
in any other nation if it wasn;t essentially under their or Russian protection - and with no future meddling from ' Uncle Sam ' . ALSO & as regards the actual tonnage of Gold held by the Chines , you have mentiioned 35 - 35,000 x tonnes ( may be more ) & others have opined thast all in it could easilly be 70,000 tonnes + .. so when do you imagine that they will feel it may finally be the right time to reveal all and to put an end to the FIAT system for good ..??
The word 'Proxy' is a misdirection. The simple truth is that Russia invaded Ukraine for purely territorial gain (think Czar Peter and Czarina Catherine II empires) and Iran has been at war against the west for 47 years, particularly Israel, out of pure hatred of Israel and her supporters.
Unfortunately you are wrong on both counts, which is standard US propaganda.
It is fact. It seems like you don't study history or research facts. You are swallowing political propaganda.
Ronald - In this comment , you are infact describing the incredulity that everyone else feels having read your drivel - and are in fact noting what we all feel having been subjected what ever nonsense you manage to manufacture in your tiny mind
Oh, it's you again, so insecure in yourself. Your last name means 'where' in Russian because you don't know where you are on facts and the truth - LOL
Exactly - but you can almost guarentee that he'll not take the hint and will instead just double down on his ignorance ......" Stupid is as Stupid does " & all that
You're pointing to yourself
Disregard Simon. He's an angry person confused in this world and blames everyone else for it.
As Patrick has noted below - " You are wrong on both counts " - which is only to be expected as you always tend to be wrong and out of touch on everytghing you ever pass comment on .There's a pattern here and you are acting true to form ( try NOT to keep it up )
America still losing the war Alasdair? 😅