he isn't highly regarded. neither is the OP
Russia (China) officially dropping the dollar
- Thread starter ZroC
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he isn't highly regarded. neither is the OP
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Misleading thread title. China have absolutely nothing to do with dropping the dollar.
You do realise that the Yuan is pegged to the dollar right TS?
You do realise that the Yuan is pegged to the dollar right TS?
You gotta be fucking kidding me.
The West = Cartman in that Southpark episode where he's being a fat egotistical loser trying to be a superhero (because he has an exaggerated sense of self-importance but doesn't actually have genuine concern for those in need) and not understanding why everybody dislikes him.
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Quite apart from that, just how does China expect to run a trade deficit with the U.S. if they don't accept dollars? Do they think Americans will pay them in Thai baht?
And with China building up all those dollars, how does Beijing expect to get rid of some of them greenbacks if they don't exchange them for something else somewhere in the world?
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I sense demonic manifestations in you.
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They have no intention of doing that. They haven't for quite some time.
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Straight up, dude. Sometimes you must take short term losses in order to acquire long term gains. Putin has an 80% approval rating in Russia after he acquired Crimea, pretty much going to also acquire southeast Ukraine, Sochi and the Olympics were a hit, he has been spreading his influence around the world, and now he just signed a massive energy deal with China in which it was made in their currencies, not the dollar. 2013-2014 have belonged to Putin and Russia. Anybody that doesn't realize the massive gains that he has acquired not just for him, but for Russia, is insane and knows nothing about politics and Nationalism.
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Dude...Putin has won. He CHOSE all of this and it was orchestrated BY HIM. He has been shitting on the U.S. starting with Snowden and his revelations and the U.S. has lost a lot of prestige on the world stage lately. He has been wanting to cement the Eurasian Union for quite some time and he has been making a lot of moves in that region, most importantly the energy deal with China, to make that happen. Dude said that the fall of the S.U. was the worst geopolitical tragedy of the 20th century. The whole point of ALL of this is to destabilize the U.S., get revenge, and establish Eastern dominance over Western. This shit isn't that hard to comprehend.
Historical strategic chess as usual. If we have to continue to print endless amounts of money can it be viable for the future indefinitely? Maybe, maybe not. Having multiple currencies is more confusing but it is safer if not influenced by banks all the time. It looks like a battle for financial stability and superiority. Who can manage funds more wisely with not much flaw or influence, it's who can you trust? The people will choose in the end. I foresee high reliability or some currencies may disappear entirely or maybe a new system of funding in the future. :icon_chee
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China is the biggest winner here. The petrodollar CT is retarded. But the bigger issue is the contract terms. China has undoubtedly secured gas rights at a colossal discount, which is vital for them.
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Can you explain the economic logic behind this post?
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Lol, yeah I saw that too. Makes sense.
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I assume you mean the petrodollar part, since it's self evident that Russia locking itself into decades of massively subsidized gas to China is a crippling long-term constraint on Russia's most valuable resources. The Russians just got China-raped because they were under pressure, and China exploited it beautifully.
As for the petrodollar CT, there's a difference between the problem of petrodollar recycling and the theory that the dollar is artificially propped up because oil sales are priced in dollars. The former is a well-known and real problem. The latter is the realm of crackpots for numerous reasons.
http://www.nationalreview.com/articles/228368/dollars-barrel-kevin-d-williamson
At its most basic level, the problem is that just because something is *priced* in dollars doesn't mean it must be *paid* with dollars. It's like saying you personally need to hold reserves in Euros if you want to go to Europe, because everything there is priced in Euros rather than dollars. No you don't. You just need an ATM card. Even if you ultimately plan to pay somebody Euros for something, that doesn't require you to *hold* Euros. Sovereign nations change their holdings for all sorts of reasons. Russia's dollar reserves, for example, don't reflect their need to buy foreign oil with those reserves. Russia doesn't need to buy any foreign oil. The reason it holds a certain amount of US dollar denominated investment (like the bonds it has recently sold) is not because it was compelled to do so because it wanted to buy oil in the future.
But that's just one of the many loopy problems with the theory. The US dollar is the world reserve currency not because of oil fiat but in the first instance because the US economy is 25% of the total global GDP -- and so if the US economy crashes, then by definition the entire globe is ruined.
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I wouldn't even say that. It's just convenient to have a common currency (imagine trying to convert one thinly traded currency for another by having to make a direct exchange instead of just using dollars in between), and because the U.S. is such a big economy, it makes sense that the dollar is that. And the bigger issue is that being the most common reserve currency confers almost no benefit on the U.S. Losing that status would do almost no harm. It's just something that right-wing CTers fret about out of paranoia with no logic behind it.
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Zankou,
I don't follow the economic logic you're making.
1) How is China the winner here? What do you know of their contract terms with the Russians? (Perhaps I missed it.)
2) How is this related to the "retarded" petrodollar recycling?
*****
The dollar is just a medium of exchange. A lot of countries hold dollars because the market for them is the largest and most liquid in the world. Some countries have pegs to the dollar, and they hold a lot of dollars in reserves to defend those pegs. Other countries have persistent trade deficits with the U.S., and so they build up significant dollar reserves because what other currency are we going to buy their goods with?
I don't see how pricing oil in dollars significantly helps the U.S. As Williams points out in the link you referenced, the benefit to the U.S. is probably so small as to be meaningless.
So countries hold a lot of dollars because it's largely in their interest to hold a lot of dollars, and it really doesn't help us in any significant way. But I also don't see how Russia hurts themselves with a contract with China. As far as I'm concerned, this news is all a lot of hot air about nothing.
I don't follow the economic logic you're making.
1) How is China the winner here? What do you know of their contract terms with the Russians? (Perhaps I missed it.)
2) How is this related to the "retarded" petrodollar recycling?
*****
The dollar is just a medium of exchange. A lot of countries hold dollars because the market for them is the largest and most liquid in the world. Some countries have pegs to the dollar, and they hold a lot of dollars in reserves to defend those pegs. Other countries have persistent trade deficits with the U.S., and so they build up significant dollar reserves because what other currency are we going to buy their goods with?
I don't see how pricing oil in dollars significantly helps the U.S. As Williams points out in the link you referenced, the benefit to the U.S. is probably so small as to be meaningless.
So countries hold a lot of dollars because it's largely in their interest to hold a lot of dollars, and it really doesn't help us in any significant way. But I also don't see how Russia hurts themselves with a contract with China. As far as I'm concerned, this news is all a lot of hot air about nothing.
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Gazprom needs the equivalent of about $13.50 per million British thermal units to profitably finance the pipeline and the development of Siberian gas fields to feed it, a total outlay of $90 billion, Maxim Moshkov, an energy analyst at UBS AG in Moscow, said by e-mail. CNPC won
