11
International Agreements That Are Nails In The Coffin
Of The Petrodollar
http://theeconomiccollapseblog.com
http://albertpeia.com/endofpetrodollar.htm
‘Is the petrodollar dead? Well, not
yet, but the nails are being hammered into the coffin even as you read
this. For decades, most of the nations of the world have used the U.S.
dollar to buy oil and to trade with each other. In essence, the U.S.
dollar has been acting as a true global currency. Virtually every country
on the face of the earth has needed big piles of U.S. dollars for international
trade. This has ensured a huge demand for U.S. dollars and
One
of the reasons the Federal Reserve has been able to get away with flooding the
financial system with U.S. dollars is because the rest of the world has been
soaking a lot of those dollars up. The rest of the world has needed giant
piles of dollars to trade with, but what is going to happen when they don't
need dollars anymore?
Could
we see a tsunami of inflation as demand for the dollar plummets like a rock?
The
power of the U.S. dollar has been one of the few things holding up our
economy. Once that leg gets kicked out from under us we are going to be
in a whole lot of trouble.
The
following are 11 international agreements that are nails in the coffin of the
petrodollar....
#1
China
and Russia have decided to renounce the US dollar and resort to using their own
currencies for bilateral trade, Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced
late on Tuesday.
Chinese
experts said the move reflected closer relations between Beijing and Moscow and
is not aimed at challenging the dollar, but to protect their domestic economies.
"About
trade settlement, we have decided to use our own currencies," Putin said
at a joint news conference with Wen in
The
two countries were accustomed to using other currencies, especially the dollar,
for bilateral trade. Since the financial crisis, however, high-ranking
officials on both sides began to explore other possibilities.
#2
Did
you know that
The
largest economy in South America has just agreed to a huge currency swap deal
with the largest economy in
It
will allow their respective central banks to exchange local currencies worth up
to 60bn reais or 190bn yuan
($30bn; £19bn).
The
amount can be used to shore up reserves in times of crisis or put towards
boosting bilateral trade.
#3
Did
you know that
The
central banks of
“The
main purposes of the swap agreement are to support trade and investment between
#4
The
second and third largest economies on the entire planet have decided that they
should start moving toward using their own currencies when trading with each
other. This agreement was incredibly important but it was almost totally
ignored by the
According
to Bloomberg, it is anticipated that
this agreement will strengthen ties between these two Asian giants....
Japan
and China will promote direct trading of the yen and yuan
without using dollars and will encourage the development of a market for
companies involved in the exchanges, the Japanese government said.
Japan
will also apply to buy Chinese bonds next year, allowing the investment of renminbi that leaves China during the transactions, the
Japanese government said in a statement after a meeting between Prime Minister
Yoshihiko Noda and Chinese Premier Wen Jiabao in
#5
It is
not just
#6 "Junk For Oil": How
So
how is
A Bloomberg article recently detailed what
countries such as
Iran
and its leading oil buyers, China and India, are finding ways to skirt U.S. and
European Union financial sanctions on the Islamic republic by agreeing to trade
oil for local currencies and goods including wheat, soybean meal and consumer
products.
#7
According
to Bloomberg,
Iran
and Russia replaced the U.S. dollar with their national currencies in bilateral
trade,
The
proposal to switch to the ruble and the rial was
raised by Russian President Dmitry Medvedev at a
meeting with his Iranian counterpart, Mahmoud Ahmadinejad, in
#8
The
following is from a recent report that described this
new agreement between
Wen called on the two nations to expand
trade in goods, promote trade in services and mutual investment, and double
bilateral trade in three years.
The
Chinese leader also said the two countries should enhance cooperation in
mining, expand farm product trade, and promote cooperation in farm product
production and processing and agricultural technology.
China
would like to be actively engaged in Chile's infrastructure construction and
work with Chile to promote the development of transportation networks in Latin America, said Wen.
Meanwhile,
Wen suggested that the two sides launch currency
swaps and expand settlement in
#9
According
to CNN,
In
January, Chinese Premier Wen Jiabao
visited the
#10
Did
you know that
For
many years the U.S. dollar was dominant in
“We
expect at least $100 billion (about R768 billion) in Sino-African trade – more
than the total bilateral trade between
#11
The
BRICS (
A
recent agreement between those nations sets the stage for them to increasingly
use their own national currencies when trading with each other rather than the
U.S. dollar. The following is from a news source in India....
The
five major emerging economies of BRICS -- Brazil, Russia, India, China and
South Africa -- are set to inject greater economic momentum into their grouping
by signing two pacts for promoting intra-BRICS trade at the fourth summit of
their leaders here Thursday.
The
two agreements that will enable credit facility in local currency for
businesses of BRICS countries will be signed in the presence of the leaders of
the five countries, Sudhir Vyas,
secretary (economic relations) in the external affairs ministry, told reporters
here.
The
pacts are expected to scale up intra-BRICS trade which has been growing at the
rate of 28 percent over the last few years, but at $230 billion, remains much
below the potential of the five economic powerhouses.
So
what does all of this mean?
It
means that the days of the U.S. dollar being the de facto reserve
currency of the world are numbered.
So
why is this important?
In a previous article, I quoted an outstanding article by Marin Katusa that
detailed many of the important benefits that the petrodollar system has had for
the
The
"petrodollar" system was a brilliant political and economic move. It
forced the world's oil money to flow through the
The
So
what happens when the petrodollar dies?
The
following are some of the things we are likely to see....
-Oil
will cost a lot more.
-Everything
will cost a lot more.
-There
will be a lot less foreign demand for
-Interest
rates on
-Interest
rates on just about everything in the
And
that is just for starters.
As I
wrote about earlier today, the Federal
Reserve is not going to save us. Ben Bernanke is not somehow going to
pull a rabbit out of a hat that will magically make everything okay.
Fundamental changes to the global financial system are happening right now that
are impossible for Bernanke to stop.
We
should have never gone into so much debt. Up until now we have
gotten away with it, but when demand for U.S. dollars and
Keep
your eyes and ears open for more news stories like the ones referenced
above. The end of the petrodollar is going to be a very significant
landmark on the road toward the total collapse of the
So
what do you think the fate of the U.S. dollar is going to be in the years
ahead?
Please
feel free to post a comment with your thoughts below....
