The demise of the dollar

[Heracleum Persicum]

https://www.bloomberg.com/opinion/artic ... lsrc=aw.ds

https://www.globaltimes.cn/page/202203/1254958.shtml

India reportedly explores yuan in oil trade with Russia, as frustration grows over US sanctions

[Doc]

Chinese stock markets are caving in. China's dollars worthless

What a disaster !! What a disaster !!

[Doc]

Chinese stock markets are caving in. China's dollars worthless.

COVID out of control in China

https://www.youtube.com/watch?v=o6Ez2oH9wY4

o6Ez2oH9wY4

What a disaster !! What a disaster !!

[Heracleum Persicum]

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https://asiatimes.com/2022/03/dollar-re ... ncy-deals/

That implies in turn that the Saudi kingdom will maintain a significant portion of its reserves in Chinese currency, possibly in an arrangement like the Indian-Russian agreement for reinvestment of the proceeds of arms sales.

Dollar creeping towards falling off cliff

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[Heracleum Persicum]

[Heracleum Persicum]

Anti-Russia sanctions may weaken the US dollar – IMF

.. some countries are already renegotiating the currency in which they are paid for trade. Russia and India are currently preparing a rupee-ruble mechanism which would allow them to trade in national currencies while evading the dollar.

. . the radical restrictive measures introduced by Western countries amid Russia’s military operation in Ukraine could lead to the emergence of small currency blocs based on trade between individual groups of countries. Furthermore, the use of currencies other than the dollar or the euro in global trade would lead to further diversification of the reserve assets held by national central banks.

https://www.reuters.com/business/imf-wa ... 022-03-31/

[Heracleum Persicum]

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Issue in America is, and that being the main reason of beloved US of A on the downtrend since long time, is that in America "special Interest" rule America.

By definition, "special interest" interest is "financial", to make more money for their's .. their interest is not, they openly say so, the long term well being of Americans or world's population.

Their interest is "Dollar and cents" , as long as legal, It's OK.. no talk whether moral

They say this openly .. that is America

Trump time, when big debate was about "globalisation" and US jobs going to China and Mexico, there was an interview (must find and post) with a captain of Industry.

He said, American corporations allegiance is only to their shareholders. Decisions made by a company only based on "profitability", not whether it good or bad for America (meaning American people). He said, it is the job of Politicians to mind the interest of America and not the corporations.

But, politicians are elected by "special interest" and make the laws towards profitability for corporations

Profitability main driver and not "patriotism"

What is good for General Motors, is good for America "is the mindset"

That is why America losing last many yrs

Motto should be, what is good for the world is good for America too

Trump "America First" was at least honest.

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[Heracleum Persicum]

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It's official - The Russian ruble is now pegged to gold. March 28, 2022

https://www.riotimesonline.com/brazil-n ... dominance/

https://www.marketwatch.com/story/russi ... 1648415950

https://tfiglobalnews.com/2022/03/31/by ... d-markets/

https://www.kitco.com/news/2022-03-28/R ... hases.html

https://goodwordnews.com/gold-backed-ru ... ness-news/


e8GdycppTrg


5000 Rouble = 1 Gram Gold fixed price

Trump said that Putin is a really smart leader. Well, he said this for a reason! Even before invading Ukraine, Putin had prepared himself to deal with the imminent sanctions. But it was the dumb leaders of the West who couldn’t match Putin’s shrewdness. Biden imposed, what he termed as “crippling” sanctions on Moscow and excitingly waited for the Russian economy to “blow up.”

But much to Biden’s chagrin, that delusion never saw the light of the day. Now, consider Russia’s steps to shore up its currency—the Ruble. Russia, with three major steps, has effectively recovered the lost valuation of its currency. And now market experts say that the Russian Ruble is now more stable than the US dollar!

Which sound mind would hold Dollar that backed by nothing, with Trillions of Dollars budget and import balance shortfall, with danger that FED freezes the account ?

Now Ruble is backed by Gold (and massive Gas and Oil revenue).

Rest my case

.

[Nonc Hilaire]

HP-why a new topic for every post?

[Heracleum Persicum]

HP-why a new topic for every post?

NH .. I looked to post this in other threads but thought the subject does not fit in any

One was thinking Ruble will now crash and instead now pegged to Gold a big issue

But, agree, too many topics no good, fragments, loosens too much the thoughts

Agree, my mistake

[Nonc Hilaire]

I’m thinking there is probably arbitrage opportunities if one has access to Russian banks.

[Nonc Hilaire]

Rafi Farber: Ruble is priced to draw gold from Russia into the Bank of Russia. At ≈80₽/$ arbitrage starts to draw Western gold to Russia and the gold backed ₽ paper note is live.

IMO this is the real war.

https://youtu.be/xILGCZHPY5c
xILGCZHPY5c

[Heracleum Persicum]

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https://finance.yahoo.com/news/goldman- ... UK%20pound.

Goldman Sachs warns the dollar is at risk of losing its dominance, and could end up a lesser player like the UK pound

mad mullahs laughing

Iran could not get ball rolling, but now there no stop anymore

China, India , Arabs , even Europeans no more comfortable to have their's in Dollars

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[Heracleum Persicum]

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https://www.bnnbloomberg.ca/russian-coa ... -1.1748869

https://www.bloomberg.com/news/articles ... g-to-china

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

Coal cargoes to arrive this month, followed by crude in May

Several Chinese firms used local currency to buy Russian coal in March, and the first cargoes will arrive this month, ..

Both steel-making and power-plant coal are being paid for in yuan, Fenwei said. These deals are traditionally done in dollars, but many Chinese buyers temporarily halted purchases after the U.S. and Europe cut off Russian lenders from the SWIFT inter-bank messaging system.

Russia was China’s No. 2 coal supplier last year, filling the gap left by Beijing’s trade tussle with Australia.

Sellers of Russian crude have also offered to give buyers in Asia’s largest economy the flexibility to pay in yuan. The first cargoes of the ESPO grade bought with the Chinese currency will be delivered to independent refiners in May, ..

[Heracleum Persicum]

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https://www.newindianexpress.com/world/ ... 39351.html

After Russia, Iran to sell oil in its local currency instead of US dollars

Iran may soon follow the Russian example and start selling oil and gas in its currency, rial, instead of US dollars.

The rial is likely to be bound to gold, just like the Russian rouble.

If iran does that, Arabs will follow

[Heracleum Persicum]

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Doing without the dollar


https://asiatimes.com/2022/04/doing-without-the-dollar/

$.png (1.19 MiB) Viewed 6925 times

Washington’s seizure of Russian foreign exchange reserves seems like a self-defeating measure given America’s enormous and accelerating dependence on foreign borrowing.

[Typhoon]

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https://www.newindianexpress.com/world/ ... 39351.html

After Russia, Iran to sell oil in its local currency instead of US dollars

Iran may soon follow the Russian example and start selling oil and gas in its currency, rial, instead of US dollars.

The rial is likely to be bound to gold, just like the Russian rouble.

If iran does that, Arabs will follow

Is the Iranian rial a freely convertible currency?
If not, then no country would want to use it as a medium of exchange.

[Heracleum Persicum]

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https://www.newindianexpress.com/world/ ... 39351.html

After Russia, Iran to sell oil in its local currency instead of US dollars

Iran may soon follow the Russian example and start selling oil and gas in its currency, rial, instead of US dollars.

The rial is likely to be bound to gold, just like the Russian rouble.

If iran does that, Arabs will follow

Is the Iranian rial a freely convertible currency?

If not, then no country would want to use it as a medium of exchange.

Iranian rial as free as Dollar ..Exchange control stopped 1970

https://bonbast.com/
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[Nonc Hilaire]

If Iran was an Islamic theocracy there would be no rial. Just gold dinar, silver dihram and no interest paid or collected.

mad mullahs really moolahs.

[Heracleum Persicum]

If Iran was an Islamic theocracy there would be no rial. Just gold dinar, silver dihram and no interest paid or collected.

mad mullahs really moolahs.

mad mullahs no Muslims, just foolin Arab street, talk Islam but walk "Persian empire" .. they ONLY drink the best cognac and wine.

[Typhoon]

Iran could settle payments in anything, including shekels or sheep, and it would make no difference to the world economy.

Al Jazz | The Russian threat to dollar hegemony is nothing but a fantasy [paywalled?]

Western sanctions imposed on Russia in late February saw the rouble plummet to unprecedented lows, prompting Russia’s Central Bank to more than double interest rates to 20 percent and setting off fears Russia’s economy could collapse. Since then, the rouble has largely recovered, at least officially. Russia’s Central Bank even announced a link between the rouble and gold – and on April 8 it cut back the baseline interest rate from 20 percent to 17 percent.

Combined with discussions of a rouble-Indian rupee trade arrangement, and Russia’s expanded currency surplus on the back of high hydrocarbons prices, this has been trumpeted by Russian propaganda as evidence Moscow is not only withstanding the West’s economic war, but as the potential end of dollar dominance.

Moscow is not alone in making this argument and this line of thinking is not limited to its echo chambers on the far right and far left, either. Similar positions have been floated in the opinion pages of The Wall Street Journal and Australia’s Financial Review – even the renowned Credit Suisse analyst Zoltan Pozsar, in conversation with Bloomberg, argued that this may be a turning point to a new post-dollar world.

However, in reality, the current “strength” of the rouble and its supposed gold peg represent nothing but the weakness of Russia’s economy and its fiscal management in the face of Western sanctions.

First, it must be understood that the rouble’s strength, while not wholly illusory, is the result of an extreme decrease in trading levels, and the Russian government’s own capital controls. The rouble is not quite an inconvertible currency yet – Russia’s banks are not yet under a blanket ban – but almost all trading takes place on Russia’s MOEX exchange. Exporters are required to sell their foreign currency to the state.

Russia’s currency controls also mean that the rouble-gold peg is no return to the gold standard. A gold standard means that one can freely exchange a paper currency for gold. Russia’s gold peg, inversely, was to force Russian gold producers and sellers to accept a fixed amount of paper money for their gold production.

Therefore, the Russian “gold peg” should be seen as akin to the fixed price for cigars in Cuba rather than as any serious threat to the international financial order. Russia’s central bank abandoned the policy on April 7 anyway, though this has received considerably less attention from dollar doom-mongers and Kremlin propagandists.

In contrast to the fevered end-of-dollar-dominance commentary, no notable foreign investors have gone long the rouble, as the Kremlin’s own currency controls prevent them from repatriating gains. In countries neighbouring Russia, which have seen an influx of Moscow and Saint Petersburg’s intelligentsia in the aftermath of the war, the real rouble rate available at most cash counters is far lower than the official rate.

At home, however, Russia has slightly eased currency convertibility. Russians can now transfer $10,000 abroad per month, though this is of course far too little to fill a single superyacht’s tank.

In effect, what is happening is that the Russian central bank is underwriting an artificial exchange rate for Russians, but particularly for Russian importers. By doing so, the Russian state is losing hard currency on each transaction, which is why Russia’s foreign exchange reserves declined by $39bn in March even as its central bank was barred by sanctions from intervening directly in rouble markets.

The Russian state has to fulfil this role as demand for the rouble from abroad remains negligible. The vast majority of Chinese-Russian trade is not on rouble terms, and even the minority that is carried out in roubles is typically linked to the dollar, for example via international oil and gas prices, meaning that there is little financialisation of the rouble in Chinese banks. Russian firms, too, have only a thin history of issuing yuan debt. Talks with India could bolster demand somewhat, but Delhi doesn’t offer the kind of exports Russia needs, particularly in the aftermath of Western technology sanctions.

This is why President Vladimir Putin has been trying to get European countries to pay for their natural gas imports in roubles. Many have been bewildered by the demand and thought it unlikely to have a major impact, pointing out that it simply means that Western firms would be exchanging their dollars and Euros for roubles, rather than Russian exporters, where the state dominates.

However, it is precisely who the transaction is with that matters – creating demand for the Russian rouble from Western firms would not only support the rouble’s continued convertibility by keeping a hole in the sanctions regime open, but would also shift the currency risk off of the Russian state somewhat.

Yet as Putin’s invasion of Ukraine continues to unleash new horrors, these gaps in the sanctions regime may well close – discussions about how the West should tighten its sanctions are continuing on a daily basis. If the rouble becomes completely inconvertible, Russia could be forced into a dual-currency system with a convertible and non-convertible version, as seen in Cuba or China with its domestic and offshore yuan (CNY and CNH), respectively.

For now, Russia can sustain its illusion of rouble strength thanks to a strong current account surplus meaning it has hard currency to spend, even as it faces looming default and has seen most of its assets frozen. This will no longer be the case if Europe ultimately does agree to an oil and gas embargo.

The Russian state may also grow tired of effectively subsidising its importers and those seeking to take cash abroad, given Putin’s turn to autarky and lashing out against fifth columnists. The risks of a further rouble collapse are very real. Russia’s threat to dollar hegemony, however, remains a fantasy.

[Nonc Hilaire]

Sprott on the future of the dollar.

https://sprott.com/insights/sprott-gold ... n-s-gambit

[Heracleum Persicum]

Iran could settle payments in anything, including shekels or sheep, and it would make no difference to the world economy.

.. really funny


West now in long term confrontation with Russia and China

That means, West has no other venue than to bend to the # 1 and # 2 Oil and Gas reserves holders in the world

Venezuela – 304 billion barrels. Venezuela has the largest oil reserves of any country in the world, with more than 300 billion barrels of proven reserves. That is a 17.5% share of the entire global resource

Iran holds 157,530,000,000 barrels of proven oil reserves as of 2016, ranking 4th in the world and accounting for about 9.5% of the world's total oil reserves

And

Iran is # 2 Gas reserve in the world (after Russia)


Meaning, If West wants to bypass Russia, and world economy pics up, West will be badly dependent on Iran Oil AND Gas .. nobody can offset Russian oil and gas cut to West except Iran and Venezuela

If so, West will help Iran to dramatically increase Oil production, probably up to 10 m b/d (shah time Iran hit 6 m b/d) and develop Iranian Gas production dramatically.


Present world daily Oil production is around 100 m b/d .. if economies pick up , specially India and China, world would need 120-130 m b/d oil

That shortfall would make Oil $ 150-200 a barrel

Iran exporting 8-10 m b/d @ 150 $/b = $ 1.4 Billion a day = at least $ 500 Billion a yr

Add to that (maybe same amount) Gas export

When at the same time America to eyeball in deficit , AND , Chinese not buying the T-bills


If all this happens, and, Iran is paid in Rial, if so , Iranian Rial could replace Dollar as world currency

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[Typhoon]

Thanks for the laugh.

[Typhoon]

FT | Central bankers agree: the dollar’s still the top dog [paywalled]

The greenback remains unchallenged as the currency of choice for monetary officialdom

Claire Jones APRIL 24 2022

We’ve been writing about the international monetary system for long enough to be somewhat dubious about oft-repeated claims of the dollar’s demise.

Sure, we can see why the greenback ought to be dethroned. The US is no longer the economic power it once was, inflation’s at multi-decade highs, and now Washington has frozen hundreds of billions of dollars worth of assets held by regimes it doesn’t like.

But history tells us that global reserve currency status tends to work like Teflon in reverse — it’s really hard for all of that exorbitant privilege to come unstuck. Our faith in the dollar is only bolstered when we come across nuggets such as this:

central_bank_pollwebp.png (616.59 KiB) Viewed 6804 times

That particular piece of evidence comes courtesy of Central Banking’s latest annual poll of official sector reserve managers — that is, the people responsible for investing the rainy-day stockpiles built up by central banks across the world.

The poll of 82 reserve managers, who together manage reserves worth a whopping $7.3tn — or 48 per cent of the world’s total — was conducted between February and mid-March. So some of the respondents might have reassessed their answer following the decision to put about $300bn-worth of the Russian central bank’s assets on ice due to Moscow’s invasion of Ukraine.

But frankly we doubt there’s been too much of a reassessment among this crowd. For large, conservative investors such as these, there is simply no real alternative. As this respondent to the poll noted:

It’s not about absolute security. It’s about the relations between selected currencies. And measured by relative value, USD is still the largest economy in terms of taxes generation, it is the most technological economy (the largest global technology companies are from the US), it has the biggest financial market, the most transparent regulation and the longest tradition.

That’s not to say that there hasn’t been interest in other currencies too — over half of the survey respondents invest in the Australian and Canadian dollars, and in the renminbi. Interest in alternatives is on the up too:


Compared with last year’s survey, the numbers investing in Australian and Canadian dollars increased marginally, but the increase for renminbi is significant — 41 in 2022 compared to 33 in 2021. Indeed, the onshore renminbi is poised to win more converts, with 14% of respondents saying they are considering investing now. Interestingly, the number of respondents investing in the offshore renminbi is lower than the 2021 figure of 22…

. . . Viewed regionally, reserve managers from African central banks are notable for investing in the renminbi (both on- and offshore), and real at above sample percentages, as well as the South African rand. Reserve managers from the Americas favour Scandinavian currencies as well as the Singapore dollar and Korean won. The won is popular among reserve managers from Asia: one- third of the sample invest in this currency, compared to 19% in the survey. Just over 70% of reserve managers invest in the Australian dollar and nearly half in the New Zealand dollar, both considerably higher than the survey. There was considerable support for the Singapore dollar too.

But, in terms of the big picture, these efforts at diversification are piecemeal. As the IMF’s quarterly summation of the currency composition of the official sector’s assets repeatedly show:

dollar_resereve_currencywebp.png (1 MiB) Viewed 6804 times

Of course, at some point this will all change. No reserve currency remains on top forever. But, if central bank reserve managers have anything to do with it, the dollar’s going nowhere anytime soon.