It's Over! - China Selling Oil in Yuan?

Originally posted by lacrimoniousfinale
Perhaps someone can enlighten me on the significance of this. Surely the buyer and seller in any transaction are free to decide on which currency they will use. It could be dollars, yen, euros, sterling or the Swiss franc, just so long as both sides are happy. I don't understand why lengthening that list to include the Chinese currency should suddenly spell the end of the dollar and life as we know it.

Oil is sold only in US Dollars world wide the US made a deal with OPEC and the Saudis that we would buy their oil if they bought our debt and only traded oil in dollars... Its been that way since the Bretten Woods agreement.

reply to post by hawkiye


Can we all now admit that Obama's economic policies have been responsible for this?

Can we all see that if Obama gets another 4 years, he'll utterly destroy the country!

Originally posted by SLAYER69
I appreciate the possible aspect.

But, I have an honest question. How will this play out for Iran? I mean many here are convinced that China would step in if Iran is attacked because they are so reliant on Iranian oil presently and not only that, but are also the Saudi's largest customer. Which gives China some leverage in the ME.

But, If they will have enough Russian oil to not only supply their own huge growing internal demand and now supposedly be able to export it, Doesn't that mean they wont be so dependent on Iranian oil?

And not only that, but will now compete with Saudi Arabia and Iran for oil exports? Which would theoretically make a relationship with both Iran and the Saudis less important and lose regional influence?

Something doesn't [Excuse the phrase] sound Kosher.

I'll take a wait and see approach.

edit on 30-9-2012 by SLAYER69 because: (no reason given)

The Chinese will remain an oil importer. Its not really about the oil itself simply the means by which it can be purchased.

Its all very well have a system but you have to have oil producing countries willing to accept Yuan for the oil and third party countries willing to hold large quantities of the currency. I would suggest international trust of China isnt such that there will be a stampede to buy yuan.

There wont be any huge shift overnight but its another step towards where we are going eventually, replacement of a single reserve currency since 1944 (Dollar) with a basket of currencies. Putin was mentioning this again with Clinton a few days ago.

Looking at it from a global perspective its not a bad idea. It would prevent any one country from living way beyond its means by exporting inflation to the rest of the world.

Originally posted by beezzer
reply to post by hawkiye

 

Can we all now admit that Obama's economic policies have been responsible for this?

Can we all see that if Obama gets another 4 years, he'll utterly destroy the country!

At this point whomever is in charge it doesn't really matter. If you furiously debase your currency for 50 years and outsource your industrial base this is what happens. Its been a half century Democrat-Republican tag team effort.

Its not fixable now.

Something like this would be all over the MSM, and not a peep about it anywhere? Therefore, I am not going run down my block shrieking at the top of my lungs that the sky is falling. Last tally, China is still a significant trading partner with the US, and has a heck of lot treasuries. Over a trillion dollars.

How Much U.S. Debt Does China Really Own?

To put China's ownership of U.S. debt in perspective, its holding of $1.2 trillion is even larger than the amount owned by American households. U.S. citizens hold only about $959 billion in U.S. debt, according to the Federal Reserve.

They would lose their shirts. By making oil transactions with the dollar they take a role in strenghtening their investment. Furthermore, since this is about the Yuan? Everybody thinks the US dollar is being manipulated? Well, word round the campfire is that China has pursed lips about their currency, and is allegedly manipulating it as well. I believe other countries have complained about that. They have demanded more transparency, and have even threatened retaliatory measures about the value of their currency.

Debate on Yuan Manipulation Moves to WTO

Many countries, including the U.S., have long complained that China's weak currency gives it an unfair advantage in selling its goods around the world. Many economists say China's currency policy has contributed to its large trade surpluses by keeping the yuan undervalued.

US says China's yuan undervalued, not manipulated

The Treasury's decision touched a nerve with Senator Chuck Schumer, a New York state Democrat whose legislation -- backed by both Democrats and Republicans -- was passed in October calling for retaliatory duties on Chinese goods if manipulation were found.

"The administration continues to let China get away with flouting trade rules just for the sake of diplomacy. Calling out China as a manipulator may be awkward, but it is time to take off the kid gloves," Schumer said.

"With the administration continuing to balk on this, it's up to Congress to act."

As the clip points out, it seems the Obama Administration is indifferent to this claim and is dragging their feet when it comes time to confront it.

The Sino/US economic relationship is a tangled web, and far more complicated than any of us can imagine. I highly doubt China would jeopardize a very profitable economic relationship by going this route? To put things into perspective, they have over a billion mouths to feed. In addition to that, the standard of living for the Chinese has risen exponentionally. Does anyone really think the Chinese people are going to put up with an interruption to that by this or any other drastic economic upheavel instigated by CCP? There will be massive unrest throughout the country. The Russians will just sit back and watch. Russia loves to play the odd man out as other countries tear themself apart from within and between each other. Just my observations.

reply to post by hawkiye


Cheers, Hawkiye. I never knew that.

So, China is going to pay for Russian oil with Yuan...therefore the U.S. Dollar is going to collapse, our economy is going to tank, and we are all going to die in WWIII.

Hmmm...a few counter points.

1) If demand for the Dollar goes down somewhat because the portion of China's oil imports that come from Russia are paid for in domestic currency...then the value of the Dollar will slide somewhat...making American manufactured goods cheaper on international markets...increasing demand...putting new up-pressure on the value of the Dollar.

2) If China were to do something that created a sudden and steep drop in the U.S. Dollar (let's say it dropped in value 50%)...it would suddenly find that it's manufactured goods are no longer relatively cheap in the U.S. or elsewhere. Its Export economy would collapse overnight...because it has not yet developed a large enough middle-class in China to take up the production losses.

3) Oh, and China would lose about $600 billion in the former value of its U.S. Debt held...not that that would be a huge problem overall.

4) Right now, the Chinese Yuan is pegged to the U.S. Dollar in daily trading (just watch the daily currency charts). If they did not unhook...their currency would dive right along with the U.S currency...which people here are claiming would spell disaster. If they floated their currency away from the U.S. Dollar, and for some reason the Yuan then rose strongly against the Dollar - they would out of business in America (not to mention the rest of the world...see number 2 above).

It will be interesting to see if this new currency agreement on oil trades between China and Russia has any effect on U.S. Dollar values...I rather doubt it personally. But, if it does, I can see nothing but positive things coming to the U.S. economy as a result.

Economic Armageddon? I think not. WWWIII...why exactly again?

reply to post by Jakes51


The sky is falling. Ignoring dollar when trading oil is the key. The debt owning era now shifted to ... not dinar.

Its euro. Iran favor dinar, euro and few others to trade the oil. China is testing the water to see if its warm (actually they are luring others to do so too). Where is dollar in this case ? - I guess on same playing level ?

No, dollar is not on the same playing level, its worse. Due to huge debt and overflow, we can expect inflation. USA is on the same edge as Greece in last 2 years, and slightly better than Spain currently.

You wont realise it until this come around - debt ceiling breached and China not buying the paper money anymore. They got new pet - euro and heck, for fun, can trade in their own money. Sure Fed can print all you want, but then the doom will get darker. The title is not that gloomy, but that is the signs to know.

To understand how desperate it is, think about this

US allow China to bypass middleman for paper money (wth ???).
US debt ceiling raised - again, despite so much debt (keep postpone arent we ?)
Euro is low and getting lower - time to buy isnt it (China thinking)
Petrodinar, petroyuan, petroeuro, petrorupee, petrodollar. (Yay in military power, ouch in economy)
Various act enacted - Frank Dodd etc etc to control the money flow. (If its really needed, they do it decades ago)

Greece fall because of Olympics spending, US will because of Gulf War. Blame it on Bush not Obama. If We the people really love US - go for Ron Paul, he got point. Romney is another Bush, but I think he will get the chair, good luck with that.

Chart says this - dollar is coming down in monthly term but rising on weekly. Chart never lie and objective. The market dont care what you think, we all have to follow it.

I'm calling shenanigans on this one.

I've found a couple of examples of this article, but no link to any evidence in either. It's just some guy saying that China made this statement, but there's no evidence of the statement being made. You would have thought that there would be a quote of the statement if it existed.

I've also ran a search and come back with nothing but those articles.

You'd think that if this had actually happened as the OP suggests there would be some traders, industry ragas and market bloggers mentioning it! There would be more than just a couple of random blog posts stating it as true and without any evidence to back it up either.

I'm sorry, but I'm gonna need a lot more evidence for this than "here's a link to some blog post saying that this guy read a statement that doesn't seem to exist..."

I think I'm in an ATS time warp, didn't this happen last month too ?

Originally posted by syrinx high priest
I think I'm in an ATS time warp, didn't this happen last month too ?

2008 - 2011 and in may, july, august this year...type china yuan in the ATS search

I wish this would start a trend and other countries shun the US dollar in favor of other currency to buy oil. The U.S. dollar needs to tank badly. The US dollar needs to crash so badly, that it is unrecoverable as a currency.

In short, The FED needs to DIE. Then we need real revolution and start over. Problem with overthrowing a mighty tyrannical government like the US government is your never going to do it if the government has a stable economy that can protect them from We The people.

reply to post by detachedindividual


Shows you how controlled western media is. It's blacklisted for a reason. Try searching for articles written in chinese and translate it. Probably have better luck.

Sorry,. not buying this,. it would be all over the news and there is nothing.
this is just another empty doom threat from a non credible source.

reply to post by JohnPhoenix


Bingo, you got it. Its not about nuke, that just an excuse. Its about saving the dollar.
To save my money = need to save government = need to save dollar = need to destroy competitor = need to destroy that bourse = need to destroy Iran.

Occupy Wall Street should be Occupy The Fed instead.

China selling oil or not is not the important case, the case is - will dollar still the dominant reserve currency ?
Look at dollar yourself, 14 trillion for 6 billion people and not everyone use it. Suddenly it sounds like theres too much dollar is it ?

reply to post by NullVoid


the decline will be gradual. nobody can fill it's role for years to come. no doom, sorry. just a slow, long decline from superpower status to large power.

reply to post by Jakes51


lol i would say your avy is well chosen indeed.

your 1st 2 sources are the government AND the WSJ?



and no, the chinese wont lose any shirts or articles of clothing, they'll be tearing them off your back along with your pants, shoes, hat, and underwear.

after crashing and trashing the US by pulling the rug out from under them.
they can then buy up the country for Zimbabwean pennies, just like the privatizers and predator capitalists have been doing for quite some time.

but hey, if you get caught with your pants down, the chinese will be sure to thank you, being a civilized and polite people, for not having to rip them off you

China backs it's currency with gold. America backs it's currency with nothing but jobs/working families. Eventually when the debt/gdp overlap we will see the banks owning most American homes and business. America will be controlled by a world organization, not American citizens.

Dollar no longer primary oil currency as China begins to sell oil using Yuan
Posted: Sept. 14, 2012

Originally posted by mobiusmale
So, China is going to pay for Russian oil with Yuan...therefore the U.S. Dollar is going to collapse, our economy is going to tank, and we are all going to die in WWIII.

Hmmm...a few counter points.

1) making American manufactured goods...

2) If China were to do something that created a sudden and steep drop in the U.S. Dollar (let's say it dropped in value 50%)...it would suddenly find that it's manufactured goods are no longer relatively cheap in the U.S. or elsewhere. Its Export economy would collapse overnight...because it has not yet developed a large enough middle-class in China to take up the production losses.

3) Oh, and China would lose about $600 billion in the former value of its U.S. Debt held...not that that would be a huge problem overall.

4) Right now, the Chinese Yuan is pegged to the U.S. Dollar in daily trading (just watch the daily currency charts). If they did not unhook...their currency would dive right along with the U.S currency...which people here are claiming would spell disaster. If they floated their currency away from the U.S. Dollar, and for some reason the Yuan then rose strongly against the Dollar - they would out of business in America (not to mention the rest of the world...see number 2 above).

It will be interesting to see if this new currency agreement on oil trades between China and Russia has any effect on U.S. Dollar values...I rather doubt it personally. But, if it does, I can see nothing but positive things coming to the U.S. economy as a result.

Economic Armageddon? I think not. WWWIII...why exactly again?

lol another delusional who will be thanked by the polite chinese for inserting the shaft himself up his...
1 -...making American manufactured goods...
WTH are you talking about? isnt everything made in china already

2-more fantasizing, who told you china was a capitalist country, bloomberg, the WSJ? HELLOOOOO!!!! CCP!!!?
3-see my repy to jake the zombi
4- the winners write the rules, see reply #2, and paper money is ultimately worthless , land resources and a subject population weakened by self-immolation post economic-collapse will more than make up for a piddly monetary loss, i'm sure chinese millionaires and billionars losing most if not all their recently made money will be quite content to become the mandarins of new york, california, florida, and the remaining 47 states [plus territories]

but hey, with thinking like that it's inevitable now