Russia Coal and Oil Paid for in Yuan Starts Heading to China

Russian coal and oil paid for in yuan is about to start flowing into China as the two countries try to maintain their energy trade in the face of growing international outrage over the invasion of Ukraine.

Several Chinese firms used local currency to buy Russian coal in March, and the first cargoes will arrive this month, Chinese consultancy Fenwei Energy Information Service Co. said. These will be the first commodity shipments paid for in yuan since the U.S. and Europe penalized Russia and cut several of its banks off from the international financial system, according to traders.

Russia Coal and Oil Paid for in Yuan Starts Heading to China

And so it begins: the long death march of the U.S. dollar as the global reserve currency.

I find this tidbit in the article particularly provocative. The strategy of eroding the structure of the current dollar-based financial system, from the inside out, in a microscm: a U.S. business journal providing the Chinese perspective on the pending collapse of the U.S. petro-dollar (co-authored by one Qian Chen)

China has long bristled at the dollar’s dominance in global trade and the political leverage it gives the U.S.

Efforts to chip away at the status quo are now being accelerated by Western steps to punish Russia for its war of aggression.

You catch that last sentence?

That's right: we in the West are helping to hasten the demise of the petro-dollar. When countries see that measures can be taken unilaterally to cut them out of the global finance loop...why in the world would they want to continue trading purely in denomination (dollar) of the single, unilateral country (the U.S.) that is deciding their fate as it pertains to participation in things like the global energy markets?

This brings another dimension of interpretation of the "sacrifice" meme that the Biden cabal keeps whispering in your ear. A double entendre:

- YOU (peons in the West) pay the price of higher everything, inflated cost for driving up energy prices deliberately
- YOU (peons in the West) help us tie down your economic system for sacrifice on the alter of Globalism

That's right, all of your virtue signaling with protesting Russian energy exports, and closing down McDonalds in Russia, and embargoing Russian products, and closing down banking and loan services to ordinary Russians, and feel-good sanctions on ability of ordinary Russians to board commercial flights, are ALL adding more fuel to the fire that will eventually rise to a conflagration that will help turn the petro-dollar into a charred pile of green embers.

Maybe folks in the West don't understand the full weight of what that means, and we know, folks that don't live in the West (and even some who do live in the west. Strange position to be in for someone living in an open, free society under the aegis of the petro-dollar but rooting for it to collapse) will certainly shed no tears over the demise of the p.d.

Here is some material to read up on regarding the implications of the end of the dollar as a reserve currency, with emphasis for what that means for folks in the U.S.

If the dollar were to eventually lose its reserve status, its exchange rate could fall, US interest rates could suffer, and US equities and fixed income could potentially under-perform

Let's, for a second, forget the ramifications on the U.S. economy regarding the viability of fiat currency in a world where control of monetary policy of the dollar no longer magically bestows ability to purchase goods and services from other countries simply by willing dollars into creation. Let's focus on the purely financial, not wider economic or manufacturing/goods/services implications.

"US equities could potentially under-perform"

In other words, there is less emphasis and perceived value for securities traded by U.S. corporations. Wall Street becomes just another name, no longer a key nexus of global stock trade.

"Ah, who cares? That'll just hurt those big stock brokers in New York, and everyone knows they have it coming"

While I don't disagree with the final part of that opinion, the knock-on effect of this will impact everyone, everything, business and corporate policy at all levels in the West.

If companies see less value in trading in dollars, in being listed in the NASDAQ or S.P. 500 .....then why have your company based in the U.S. at all? It may actually be more lucrative and certainly more cost effective, in terms of the financial side, to be based in continental Europe or eventually where all roads will lead : China. It'll be much easier to be in compliance and deal with regulators from Chinese markets when you're in the same time zone, in the same country, able to meet without spanning the globe.

If a company is based in China, rather than the U.S. or the U.K. .... what does that portend? What does that mean for Jane and John Q.?

Well, primarily, Jane and John Q might not have to worry, or to say it differently, will have a different set of problems, because they may not have a job to begin with. With all of migration of corporate property, headquarters and office locations Eastward, that eviscerates the labor force here, at every level from folks cleaning the bathrooms to the white collar staff, legal counsel, M.B.A.s and IT professionals. Strictly speaking, you can still likely work for such a company, but....the pool of folks your competing against for work likely tripled (from 300-400Mn to 1.1Bn+), and they will actually live closer to the H.Q. than you, a nice advantage, unless you're thinking of moving to Shanghai or Beijing?

Beyond simple job security, how does that impact things like corporate governance, H.R., regulation, etc?

How doesn't it impact corporate policy?

- you think Chinese-based companies will give AF about what the FDA or EPA think or say?
- Diversity and Inclusion. Gone. Ended.
* Discrimination against Africans in China
* CNN Article on Chinese/African dynamic
- labor negotiation, benefits, workplace safety, all up for grabs
- essentially rolling back the progress that's been made in the workplace in the West over the past 50+ years

So when you begin to look at the Russian invasion in this light, and understand how the dominoes have been positioned, who stands to benefit from the chain reaction of moving Russian energy and other trade out of the dollar, it starts put things in a different context.

I wonder, in the back channel communications, prior to the invasion, when China gleefully agreed to pay for their Russian energy purchases in yuan if Russia would move on Ukraine and start this entire financial calamity (for the West) rolling, if the planners figured this would proceed to plan with so few disruptions, and seemingly so few questions asked, by the very people who are throwing their own heightened financial position into the fire.

It always boils down to what the seller wants for their resource.

Who would want a worthless-assed dollar bill for anything these days?

Wait'll they start asking for the direct exchange of gold. Must be one of the reasons there was such a hard push to go electric.

originally posted by: Snarl
Wait'll they start asking for the direct exchange of gold.

What's with this fixation on gold? Using it as a medium of exchange, especially for transactions in the hundreds of millions to billions, is incredibly inefficient to the point where it's not even remotely practical.

originally posted by: AugustusMasonicus

originally posted by: Snarl
Wait'll they start asking for the direct exchange of gold.

What's with this fixation on gold? Using it as a medium of exchange, especially for transactions in the hundreds of millions to billions, is incredibly inefficient to the point where it's not even remotely practical.

It's inefficient for anyone outside BIS, who, in the bowels of their Swiss fortresses, can settle millions in sovereign debts by wheeling carts around to different sections of their vaults.

I think your making reference to the pending conversion of everything from currency swaps/settlement of sovereign debt to buying groceries using digital species, and that is always more efficient than moving bullion around, no matter how fast the dwarves in the BIS dungeons can move carts around, and anyways BIS is really just for the top level players in global finance, not the rest of us.

originally posted by: SleeperHasAwakened
It's inefficient for anyone outside BIS, who, in the bowels of their Swiss fortresses, can settle millions in sovereign debts by wheeling carts around to different sections of their vaults.

It's even inefficient for them as well, there's not enough gold in the world to make this practical in any manner. Shifting hunks of metal around are pointless when settlement needs to take place in milliseconds.

originally posted by: SleeperHasAwakened

And so it begins: the long death march of the U.S. dollar as the global reserve currency.

Long..that's the debate. How long.
My fear is it won't be that long.

a reply to: SleeperHasAwakened

- YOU (peons in the West) pay the price of higher everything, inflated cost for driving up energy prices deliberately
- YOU (peons in the West) help us tie down your economic system for sacrifice on the alter of Globalism

To paraphrase ATS'S highest ranking mid-level mason who regularly attends golf days for charity :

Any financial difficulty you might be going through is your own damn fault. Stop harassing the elite they've been through enough.

a reply to: Snarl

I'm all for reform on the USD to make it more robust...

But I'm not necessarily concerned the Yuan or Ruble is going to take over as the go to reserve currency.

China is going through a real estate crisis that likely won't clear up anytime soon. That wasn't the only issue surrounding their currency either, but it's certainly the biggest concern now.

The Russian ruble being pegged by gold is a fancy marketing term. Pegged =/= backed. Backed means you can swap the currency for the gold, pegged means they'll make you swap gold for a rate they deem fair for their currency but not the other way around. The only reason countries will engage in that is because they have to... Not because they want to or they think it's a fair market value. Also, Russia said they'd only take the Ruble for their oil. Taking the Yuan so soon after that proclamation shows either China doesn't want to use Rubles, or the Russians want some foreign reserve currency, both are bearish.

originally posted by: CriticalStinker
The Russian ruble being pegged by gold is a fancy marketing term.

If it were actually even true.

a reply to: AugustusMasonicus

I can kind of see how the rumor started. They've enacted a few superficial trade practices, but at the end of the day they're just that.

I also don't see China helping out too far past the purchase of some oil they need. They have their own battles in the near future. I can't imagine they risk their trade footing over Russia.

originally posted by: CriticalStinker
I can kind of see how the rumor started.

Mostly by Russian American Bund members LARP'ing and then believing their own BS.

a reply to: AugustusMasonicus

If you think about it logically. A short ton of gold is $56 million approx. So cool you buy the oil. Now you have to transfer that gold to the seller. Who is paying the transfer cost of that gold? Physically moving the gold would be expensive. You are right that it's not too practical.

a reply to: grey580

Then what do you do with it? Buy something else? Who moves it then and to where? It's just so absurd to think any sovereign nation is going to move gold around with any practicality or convenience with regularity.

Congratulations go to the Biden and his band of merry Democratic/Socialist traitors. They wanted to destroy the US as a world power and they are well on there way to do it. And I think the real problem here is the US just may not make it to 2024 to vote them all out.

The Biden's polices implemented since he took over directly caused the war in Ukraine and are supporting Russian bloodshed over there now. The best weapon that the US had against all the despots and terrorists in the world was low energy prices. Because of him not just Russia but all the terrorists in the world are getting major cash injections. The next major terrorist attacks and next series of wars can be laid directly at Biden's and the Democrat's feet.

If you have the stomach look here.

www.nytimes.com...

This is probably what the US will look like in 3-10 years. Own it Democrats. When you voted for Biden well, YOU DID THIS. And history will remember you as the pond scum you are.

a reply to: SleeperHasAwakened

Trust the plan Unfortunately It is the wrong plan for America

originally posted by: Snarl
It always boils down to what the seller wants for their resource.

Who would want a worthless-assed dollar bill for anything these days?

Wait'll they start asking for the direct exchange of gold. Must be one of the reasons there was such a hard push to go electric.

Before this pandemic lol ,I read a comment online of a trucker in the USA whonwas staggered at how little loads they had to carry when they were normally running flat out .

One of the comments back was the CCP etc had said to America no more shiploads of stuff for IOU noted they wanted gold etc .

Fast forward 2 years plus and I am beginning to think there were some truth in that comments especially with the chip shortages when Tiawan never closed down that sector and factory output in China carried on as normal .

Like in WW2 it was a war between factories that was the deciding factor and if internet rumours are true the CCP has their dumbs running 24/7 with 3 d printing for a war effort and their great leap outward . All while we in the west were watching Russian .

It's not long ago we were dumping tankers of milk down the drain and truck loads of cheese was getting dropped down mine shafts and train loads of potatoes were left to rot as other crops because of labour shortage and market conditions as well as slaughtering animals and dumping there bodies because of a lack of butcher's and various other crap we were getting fed by TPTB

Not sure if it's true but I was under the understanding that China owned enough US currency that they could dump it and totally destroy the US economy .

originally posted by: Ravenwatcher
Not sure if it's true but I was under the understanding that China owned enough US currency that they could dump it and totally destroy the US economy .

That makes no sense. How would 'dumping currency' 'totally destroy the US economy'?

a reply to: AugustusMasonicus

It would flood the markets with US currency devaluing it Like Oprah everyone gets a car .

Will the petro dollar fall sooner or later yea.

This isnt that bell weather moment, China is making certain that Russia is beholden to them and china will have a steady flow of oil and coal for the future.