Petrodollar Alert: Putin Prepares To Announce "Holy Grail" Gas Deal With China

reply to post by deadcalm


Sorry if this has been asked, but since in my humble opinion you seem to be talking sense i wanted to ask what you thought might become of other currencies if the $ loses it's charm; such as the Euro, Sterling and the Aus $ ?

Sounds to me like Russia is planing for when the nazi paid thugs in the Ukraine are given odder to "Pull the gas pipes" that brings gas to Europe and our hero's from the USA come riding to the rescue with liquid gas at twice the going rates.

Russia had given the Ukraine $15bn with no strings attached aid and cheap gas to produce steel but now they are about to get rapped just like Greece by bankers that are protected by the US Military that's all over Europe.

People on the streets are starting to talk about our unwelcome friends in Europe and asking if we need this Mafia protection from across the pond

Sorry Tor went wrong, Please delete

Sorry Tor went wrong, please delete

Sorry Tor went wrong, please delete

DJW001
reply to post by PlanetXisHERE

 

Unfortunately, you have bought the hype. Real economists and political scientists consider China's rapid growth to be a bubble that will eventually burst. Did you know China actually has huge empty cities, built to create a real estate and building boom but serving no actual function?

The US has had it share of bubbles and bursts and has survived just as China will, no bursting bubble ever derailed the US economy permanently.........well the jury is still out on the last one.

No, I didn't buy anything. I guess I'm just not xenophobic enough and can deduce given the growth rates of the most populous planet on the earth with an industrious and educated workforce vs a stagnant has-been that the country that has held the top economic spot on the planet for much of the past 3 millennia will reclaim it soon. Just forget your patriotism and try to be objective.

China's ghost cities, built not in close proximity to any population centers, but HUNDREDS of miles from the nearest population centers, OBVIOUSLY have nothing to do with economic speculation. These Chinese seem to have some kind of info on some sort of world calamity, for these cities could house tens of millions of people. Do you have any idea what they know about?

reply to post by VirusGuard


Hmmmmmm....wonder who runs Tor....you obviously rattled their cage!


Rainbows
Jane

Sorry if this has been asked, but since in my humble opinion you seem to be talking sense i wanted to ask what you thought might become of other currencies if the $ loses it's charm; such as the Euro, Sterling and the Aus $ ?

reply to post by McGinty


It has not been asked....I want you to understand that this is only my best guess...but just for fun....let's say the US dollar collapsed...this is how I see things going.


The U.S. and Western economies would all face insolvency simultaneously, with the U.S. first in line.

The entire Western industrial/consumer/credit economy would fall apart so fast it would make your head spin. The supply chain would stop and stores would empty quickly. Mass panic everywhere. I'm guessing martial law would be imposed, certainly in the US...but many other countries as well. It would all depend on how much exposure each nation has in regards to the USD and how much trade they engage in with the US.

Even China and the east would be initially rocked as well....but they would recover quickly due to massive reserves of gold, huge manufacturing base, ect...the UK, Canada, Mexico, EU ect...would be in for a world of hurt in the short term due to the massive amount of exposure they have via trade agreements and large holdings of USD. However places like Canada, with a wealth of natural resources (commodities are key) would also rebound quickly due to commodities trade with non western nations. But there is not one country on Earth that wouldn't be affected....and badly...at least in the short term.

Like I said though...based on commodities or lack of them...would determine how fast a country would be able to recover. The US would be wiped out completely and likely disintegrate into civil war. Certainly the US would be finished as a superpower.

But to summarise:

All currencies cannot collapse at the same time since currencies operate in pairs. Ie if USD appreciates against GBP, then this means GBP has depreciated against USD. But all currencies could collapse against commodities (commodities are key), ie. real wealth such as gold, bread, textiles etc. This would simply mean that gold, bread, etc would sky rocket in price (hyperinflation), but the relative prices of currencies would remain the same. If one country experiences hyperinflation it does not necessarily mean other countries will.

Also...you need to remember that the US only accounts for 2% of the worlds population.

Initially it would hurt....but we'd all carry on....but the US would be finished...likely never to rise again.

Hope that answers the question.

reply to post by deadcalm


We are obviously on the same page of the same book.

Add to this that here in the UK, the Mayor of London has ordered up water cannons to be delivered by the summer. Two weeks after he made this order, the Met Police asked to be equipped with said cannons.

Now I have said it somewhere else, but if one of the richest men in the UK (Duke of Westminster) can afford to pay his taxes in ADVANCE to 2025 from 1995.....then you can bet your bottom dollar banks. politicians and corporations can also see what is coming.
Just saying
Rainbows
Jane

.then you can bet your bottom dollar banks. politicians and corporations can also see what is coming.

reply to post by angelchemuel


Though they may see it coming...in reality they are helpless to do much about it. Which is why this game they are playing with the Russians and now the Chinese is so very, very dangerous...their arrogance and stupidity could potentially lead to an end of the US/West itself...let alone the dollar.

reply to post by PlanetXisHERE

The US has had it share of bubbles and bursts and has survived just as China will, no bursting bubble ever derailed the US economy permanently.........well the jury is still out on the last one.

Excuse me? Did I say the Chinese economy would not survive? All I did was point out that the Chinese economy would not perform as the salesmen at Goldman Sachs would claimed it would. Would it help if I pointed out that Goldman and Sachs are Jewish names?

No, I didn't buy anything. I guess I'm just not xenophobic enough and can deduce given the growth rates of the most populous planet on the earth with an industrious and educated workforce vs a stagnant has-been that the country that has held the top economic spot on the planet for much of the past 3 millennia will reclaim it soon. Just forget your patriotism and try to be objective.

Speaking as someone who has studied all of the Confucian classics (with the exception of the Book of Rites) and all of the strategic writings from Sun Tze to Mao, I find your innuendo of xenophobia, well, misplaced. In case you have not noticed during the course of our interactions, I display a notable lack of 'patriotism,' and a damnable sense of realpolitik. China will be subject to, at the very least, the same sociopolitical forces as the United States.

China's ghost cities, built not in close proximity to any population centers, but HUNDREDS of miles from the nearest population centers, OBVIOUSLY have nothing to do with economic speculation. These Chinese seem to have some kind of info on some sort of world calamity, for these cities could house tens of millions of people. Do you have any idea what they know about?

No. You underestimate the depths that corruption can sink to.

reply to post by DJW001


China's economy is so intertwined with the United States and the European Union that losing one or both would be a disaster for China's economy, which is in the process of contracting.

As for Chinese ghost cities the stated purpose - expansion, is just one part of the reason for building them. The major part revolves around their economy, namely employment and materials used for construction, which also deals with employment.

For the most part China uses construction to plug the gap in their employment / factory / construction sectors. The problem they are running into is the downturn in their economy, which was a result of the issues in Europe and the US.

China could announce they are dropping the dollar tomorrow. The problem with that announcement is they would be taking over a trillion dollars of US debt holdings and flushing them down the toilet.. Again something that would be detrimental to their economy.

In comparison I believe if we saw a major collapse in major countries, I think the US would be one that would survive. For China I see their citizens rising up and going after the government. While the US system has its fair share of corruption, it pails in comparison to the Chinese government, from top to the very bottom.

I think these are some points people tend to either ignore or forget about when discussing dropping the dollar for another currency. The prediction of the Us dollar taking a hit when Russia and China agreed to use local currency for trade between their countries turned out to be not a major issue at all.

Finally people also ignore the economies of the EU and the US (since we are using them as a primary comparison in this scenario). Take the EU / US out of the Chinese economy and you might as well turn China over to Russia taking into account the damage that would cause to China. I don't think their economy could adapt to that disaster.

To be honest, and I am most likely in the minority, but I would not mind seeing a global currency. That experiment, on a smaller scale, occurred when Europe went to the Euro. While it has had its problems I think so far, compared to the nightmare scenarios predicted, it has been largely successful. I think that point of view has been lost with the economy issues over the last decade.

We have not seen what a healthy Euro looks like so who knows. Maybe Russia and China will choose the Euro.

So much hype over something that even if it happened would make little to no difference in the current world situation. Elaborate? sure.

China has an economy driven by and postulated by "western" consumers. When those factories become so full that the slave labor cant even enter the building what do you think will happen? Russians buy it all? Yea....get real.

I could be wrong here, but if not mistaken, 30% of Russia's gas sales go to the EU.....30%, almost 1/3

So in the event that they try to make a move on the dollar lets look at the possible hypotheticals -

*Russia and China form their deals and partners of the BRIIC drop the dollar. From the start they are out trillions, the digital and physical dollars they hold, well they just became null to them, worthless according to their own standards. It is hard to grow when you have a surplus of commodities no one will buy. Will the Southern-American nations all the sudden become booming nations as far as economies go? Nope, not in the slightest, South-American nations are 100% controlled by corrupt governments that would do nothing but ensure their pockets are lined with a flood of new trade possibilities, while the masses remain in poverty. Think I'm wrong? try protesting in Venezuela.

*Russia and China make a slight move on the dollar, with the intention of getting other BRIIC nations keen to the idea of dropping the dollar. This wouldn't be un-noticed, and likely has been going on in a nonchalant manner world-wide. However, it is in such minor proportions that it is insignificant, lets face it, they can only SELL the debt. If the dollar is collapsed and worthless, no one will buy that debt, regardless of the price. It would be like buying dirt in the hopes that one day you are the only person to possess dirt.

*Russia and China do not reach a deal. Honestly of my hypotheticals this scares me the most. The west continues further sanctions against russia (never ever thought I would ever think I would ever say sanctions on Russia....ever). China remains neutral to opportunistic gains, and in such a situation the "west" could give there resources to china for much less than the russians could offer, effectively nearly eliminating russian GDP, sending the bear into a panic with a KGB leader and a red button.

*Russia annexes Crimea, doesn't pursue further into Ukraine, couple months later all is resolved (at surface value). The world economies continue on, the dollar is not collapsed, and a year later we have something new to fear-monger on. Western ties are too tightly knit for BRIICS to make a move at the moment. Western nations can completely sustain every necessity within western-only nation trading. With the US emerging as an energy exporter, NATO has no need to fear energy needs. I have long thought the US is sitting on reserves that must easily trump the middle east, especially when considering Alaska, now come to find out I'm right.

Nothing is going to change, not anytime soon, and not without a big ol' world war. To those that say to mark their words, people were saying this same thing over a decade ago, and we are yet to "mark their words"

The problem with that announcement is they would be taking over a trillion dollars of US debt holdings and flushing them down the toilet.. Again something that would be detrimental to their economy.

reply to post by Xcathdra


You forget...they have something that will be far more valuable when the US dollar tanks....and that is GOLD...and lots of it. They also have a very large manufacturing base...and by 2016...they will have surpassed the shrinking US economy to become the largest in the world.

The US claims to have gold....but they couldn't give the Germans back a paltry 300 tons of theirs that they asked for....wouldn't even let them see it or audit it. In the last year they have only given them 5 tons back. Fort Knox has not been audited in more than 60 years...and even when it was supposedly audited the last time...there were no independant observers allowed and only 5% of the gold was tested.

In comparison I believe if we saw a major collapse in major countries, I think the US would be one that would survive

What makes you think that? If the Russians and the Chinese are going to gang up on any currency...it will be the US dollar. After all, the US is the greatest threat to both of them.

For China I see their citizens rising up and going after the government.

I don't. Even if they did....the Chinese would crush the protests and the protesters. It's been done before.

The prediction of the Us dollar taking a hit when Russia and China agreed to use local currency for trade between their countries turned out to be not a major issue at all.

Methinks you haven't seen anything yet. The days of the petrodollar are numbered...this cannot be disputed. When it does...the US currency collapses and you will be a 3rd world country OVERNIGHT.

I don't think their economy could adapt to that disaster.

The Chinese have adapted to much worse in their 6000 + year history....this will be no different. The Chinese are producers....the US are consumers. Manufacturing accounts for 12% of US GDP. Financial Services make up 30+ percent of US GDP.

China produces goods that people need...the US does not. China is a commodities based economy...the US is not.

At this point I would like to remind you that the Roman Empire once thought the way the US does now....and where are they? The Romans had a vast empire...the most modern, highly trained, and technologically advanced army on Earth, massive trade networks....and it couldn't save them from the social and economic realities that brought them down in the end. If the US fails to learn the lessons of history, they are surely doomed to repeat them.

occurred when Europe went to the Euro.

Ask the Germans how that turned out. They are the lender for every situation....watching the EU siphon off their wealth to bail out nation after nation. I'd say that experiment has been a dismal failure.

I think that point of view has been lost with the economy issues over the last decade.

I think you might be lost....nation after nation in the EU has found itself insolvent and in need of massive cash infusions to limp along. Unemployment rates are through the roof, social unrest is everywhere, as is poverty....well over 50% of those under 30 in the majority of European countries are unemployed....and thats not changing anytime soon.

But don't let the facts get in the way.....

. Maybe Russia and China will choose the Euro.

Yeah...and maybe I'll marry a supermodel...win the Superball lottery, and be the first man to live forever....LOL.

I doubt that very much.

deadcalm
But don't let the facts get in the way.....

Being nothing has occurred in this area there really are no "facts" to put into the debate, let alone having them get in the way.

Its called speculation based on past and current patterns / behaviors. While everyone wants to see the US go down, they are clueless as to what ripples that would create and the number of countries affected by it.

Russia's economy is in the tank...
China's economy is having massive issues...

Neither are capable, at this point, of being self sufficient to the extent of not being affected.

Not to mention the US market is where a large chunk of Chinese goods go. If our currency tanks, we wont be able to afford all those nice stolen Chinese inventions. Without that consumer base, and no other country to plug a gap that large, China would be screwed the same.

But yes, by all means, lets not let facts get in the way....

I have no idea why you and others think actions in one country would be restricted to that one country... Its like the idiotic comments people make about Russia using nuclear weapons and thinking the radiation / fall out stops at the border.

As I was saying...

Capital controls feared in Russia after $70bn flight

Sanctions or not, who's to say Russia wouldn't do it anyway?? Like Russia threatening to change its stance on Iran, who's to say they wouldn't anyway?

Russia's economy is in the tank...

reply to post by Xcathdra


No...in fact it isn't.

The economy of Russia is the eighth largest economy in the world by nominal value and the sixth/ fifth largest by purchasing power parity (PPP).[24]

The Russian economy is currently labeled as a high income economy by the World Bank.[25] The country has an abundance of natural resources, including timber, precious metals, and particularly fossil fuels (oil, natural gas, and coal) that can be developed without the constraint of OPEC production quotas and other rules (Russia is not an OPEC member).[26] In recent years, Russia's oil and gas production and pipeline projects have been not only a primary source of Russia's economic growth but also a geostrategic lever in the country's relationship with Europe and Asia.[27]

In late 2008 and early 2009, Russia experienced the first recession after ten years of experiencing a rising economy, until stable growth resumed in late 2009 and 2010. Despite the deep but brief recession, the economy has not been as seriously affected by the global financial crisis, largely because of the integration of short-term macroeconomic policies that helped the economy survive, as well as low levels of sovereign debt.

Economy of Russia

HERE

China's economy is having massive issues...

Observe....

The socialist market economy[17] of China is the world's second largest economy by nominal GDP and by purchasing power parity after the United States.[2] It is the world's fastest-growing major economy, with growth rates averaging 10% over the past 30 years.[18]

China is also the largest exporter and second largest importer of goods in the world. China is the largest manufacturing economy in the world,[19] outpacing its world rival in this category, the service-driven economy of the United States of America. ASEAN–China Free Trade Area came into effect on 1 January 2010. China-Switzerland FTA [20] is China's first FTA with a major European economy, while China–Pakistan Free Trade Agreement came in effect in 2007 is the first FTA signed with a South Asian state. The economy of China is the fastest growing consumer market in the world.[21]

By 2010 it was evident to outside observers such as The New York Times that China was poised to move from export dependency to development of an internal market. Wages were rapidly rising in all areas of the country and Chinese leaders were calling for an increased standard of living.[40]

China is the largest creditor nation in the world and possessed in February 2012 approximately 20.8% of all foreign-owned US Treasury securities.[43]

Economy of China

HERE

Neither are capable, at this point, of being self sufficient to the extent of not being affected.

Much more capable than the US my friend...the US only represents 2% of the worlds population. The Chinese and Russians can take their considerable wealth of commodities elsewhere....after all, they have the other 98% of the worlds population to work with.

Without that consumer base, and no other country to plug a gap that large, China would be screwed the same.

China would be hurt in the short term, however they would recover far faster than the US. The US has the largest debt in the world, and it is growing by 3 TRILLION a YEAR. China has the largest reserves....the largest manufacturing...and as of next year....an economy bigger than the US and they are focussing on internal consumption and expanding trade with Russia, India...the EU and moving away from the dying US market.

But yes, by all means, lets not let facts get in the way....

EXACTLY.....

deadcalm:

...let's say the US dollar collapsed...

I've read through your postings and I like your calm and measured opinion. However, I feel the only way the dollar would collapse would be a forced attempt to crash it, or the more likely scenario, the petrodollar is ignored by other countries. This is not to say that if the latter occurred, certain wealthy American investors would seek to make fortunes from the crash, because they would by converting their dollar stocks to other currencies at the right time.

Your thoughts on the American economy undergoing hyperinflation are probably correct, as I believe that is the future prospect. However, although other Western economies would be hit, they won't crash and burn as America would, only in the areas where the American market is used. Shrewed Western countries other than America will be investing in the Eastern economies as doing so will provide buffers against America's economic crash. It is this fear of a contraction in the American economy that is driving the rise of the Eastern economies, because the banking crash of 2008 driven by American financiers wanting to make a quick fortune from it, really miffed the world's other financiers who didn't make fortunes, but made losses instead. American financiers won't be allowed to do that again, so a lot of extrication from the American market has been going on, we see this in the BRICS countries, with others joining.

America is hyping the threat of Russia to undermine Russian investment, so Putin will respond shrewdly. He won't do anything rash to respond, he'll allow the Ukraine tensions to relax over a period, consolidate Russia's position in the Crimea, and only the Crimea, and forge ahead with deals with the other BRIC countries, and help to consolidate the Eastern markets.

However, I feel the only way the dollar would collapse would be a forced attempt to crash it, or the more likely scenario

reply to post by elysiumfire


This is exactly what I think is going to happen. China has been hoarding gold at an alarming rate...beefing up and modernizing their military, and has been using their reserve US dollars to purchase mining, oil, mineral businesses all over the world. When the time is right the Chinese are going to rip the rug right out from under the US economy....and there will be nothing to stop them from going straight to the bottom.

Now the US is pushing Russia right into the arms of the Chinese....bad move. Very bad move.

I agree in principal with everything else you said.

Prepare yourself if you live in the US...it's gonna be a bumpy ride indeed.

Best of luck...and thanks for the compliment.