Russia and China officially abandons the petrodollar

[narutokage99]

The beginning of the end of the dollar, which unfortunately will not happen without significant breakage and worldwide damage . Which, a priori seems surprising is how long it took the Russians and the Chinese to make such a decision.

You must be registered for see images

After Putin announced on August 14 that Russia would now sell its gas in local currency rather than in USD, it will not take long for Moscow to develop a comprehensive agreement with China up by this.

According to RIA Novosti, citing the magazine Kommersant, the Russian government has already dispatched two ships to Europe on board with 80,000 tons of oil from Novoportovskoye an extraction field in the Arctic. Both deliveries will be paid in rubles, not dollars, unheard of. Russia will also deliver oil via the Eastern Siberia-Pacific Ocean Oil Pipeline ( ESPO) to China that will be settled in Chinese yuan.According to Kommersant, this is a measure of "protection" of Russia to the sanctions imposed by the USA against them.

So it seems that the only tangible result of the policy of sanctions against Russia will be a real shock to the hegemony of US dollar in international transactions and questioning finally its role as a global reserve currency.A hegemony never contested since 1945.

Now, China the first economic power in the world in 2014, and Russia - respectively the first and second largest producer of oil and gas in the world - will now perform their trade in their respective currencies.A development that completely redefines the international political and economic order ...

 

[GhostProject]

Man, I don't know how the U.S never thought about how hard the economic oil plan combined with reckless spending would backfire on us in the long term.

Well saw this coming. Incoming more anti-Russian propaganda in U.S media, and probably some more extreme statements about Putin from our politicians in office.

This is quite a predicament if it's true, which I find believable since Russia has suggested this idea through its recent actions and goals.

 

[Gerkak]

This is good news

 

[Lana Del Taka]

Sooooo is this good or bad news?

 

[Wabbit]

in between all these throwing sanctions at each other and propagandas by both sides there was nothing affecting US directly,they affected more to EU and Russia than US. Idk if it is a loss for US or whatever because I dont get this petrodollar stuff,if it was why are they doing it now? Russia and China and many other countries would have done it a long ago.

 

[Ψ Veritas Ψ]

Im not an american, but i love dollars

no money HAS ever lookED so money-like, its simply beautiful

 

[Blackdeath667]

Sooooo is this good or bad news?

idk...but it seems to be i guess??

 

[6ari8]

Sooooo is this good or bad news?

Incredibly bad news to the U.S:

 

[Aim64C]

Sooooo is this good or bad news?

The answer to this requires a bit more understanding of what the "dollar" really is:

[video=youtube;iFDe5kUUyT0]https://www.youtube.com/watch?v=iFDe5kUUyT0[/video]

The reason why the dollar has not collapsed as of yet is because of Opec.

If you want to buy oil on the open market (and what nation looking to grow doesn't?) - then you have to do business with Opec in the form of U.S. treasury bonds - or "I.O.U.s" from the U.S. government. Alternatively, Federal Reserve bonds are treated as being identical to currency bonds.

This is the danger of all fiat currency systems. It is far easier to 'print more' than it is to figure out how to spend less. The end result is always hyper-inflation. The BRIC will suffer it, too, in due time - it's just that it is a different system with countries that have vaults filled with gold and growing societies - so investors are very willing to buy into the BRIC, particularly if it can get them oil and whoever buys the bond is able to see the amount stated on the bond paid to them (that wasn't also borrowed into existence).

Hopefully - it means a return to non-fiat currency systems backed by precious metals or fixed concepts like bitcoin that are not open to manipulation by legislative mandates. No legislative body can authorize the existence of more gold. At the very least - gold will always have a 'real' value worth the time, effort, and resources use to mine/sift and refine it. Though the rarity of it and universal acceptance of it in bartering pretty much guarantees its market value is frequently greater than the cost to introduce more to the market.

Anyway - the problem is that change, particularly one few people are prepared for, does not come easy - especially when that change cannot be prevented.

This will essentially put more pressure on the dollar as it means there will be options other than U.S. treasury bonds when it comes to purchasing oil. Why would you buy a promise to pay you back in 5 years from a country with a currency inflating in real-world values by nearly 5% each year (government inflation adjustments exclude commodities like fuel and food)? By the time you get paid back - you're looking at nearly a 30% reduction in purchasing power with the amount you are paid.

No sane individual would do that when the yield on the bond is 2%.

Which means the bond must promise a return of nearly 40% to make it worthwhile. If the government must issue bonds, currently, to meet its bills... then how, pray tell, is it going to pay you in the future? By issuing bonds to cover what is owed to you.

The game is doomed from the beginning.

This is partly what Ukraine is over - the natural gas in Crimea. The 'civil war' is, as far as Putin is concerned, just to keep the media entertained.

The U.S. will implode before it can manifest as a true global war, though.

I've said it before, and I'll say it again - April of 2015. By the time April comes to a close, the U.S. will be unrecognizable (if not well before then - at the rate we're going we'll be trick-or-treating with bullets and frag grenades).

 

[Lana Del Taka]

Incredibly bad news to the U.S:

The answer to this requires a bit more understanding of what the "dollar" really is:

[video=youtube;iFDe5kUUyT0]https://www.youtube.com/watch?v=iFDe5kUUyT0[/video]

The reason why the dollar has not collapsed as of yet is because of Opec.

If you want to buy oil on the open market (and what nation looking to grow doesn't?) - then you have to do business with Opec in the form of U.S. treasury bonds - or "I.O.U.s" from the U.S. government. Alternatively, Federal Reserve bonds are treated as being identical to currency bonds.

This is the danger of all fiat currency systems. It is far easier to 'print more' than it is to figure out how to spend less. The end result is always hyper-inflation. The BRIC will suffer it, too, in due time - it's just that it is a different system with countries that have vaults filled with gold and growing societies - so investors are very willing to buy into the BRIC, particularly if it can get them oil and whoever buys the bond is able to see the amount stated on the bond paid to them (that wasn't also borrowed into existence).

Hopefully - it means a return to non-fiat currency systems backed by precious metals or fixed concepts like bitcoin that are not open to manipulation by legislative mandates. No legislative body can authorize the existence of more gold. At the very least - gold will always have a 'real' value worth the time, effort, and resources use to mine/sift and refine it. Though the rarity of it and universal acceptance of it in bartering pretty much guarantees its market value is frequently greater than the cost to introduce more to the market.

Anyway - the problem is that change, particularly one few people are prepared for, does not come easy - especially when that change cannot be prevented.

This will essentially put more pressure on the dollar as it means there will be options other than U.S. treasury bonds when it comes to purchasing oil. Why would you buy a promise to pay you back in 5 years from a country with a currency inflating in real-world values by nearly 5% each year (government inflation adjustments exclude commodities like fuel and food)? By the time you get paid back - you're looking at nearly a 30% reduction in purchasing power with the amount you are paid.

No sane individual would do that when the yield on the bond is 2%.

Which means the bond must promise a return of nearly 40% to make it worthwhile. If the government must issue bonds, currently, to meet its bills... then how, pray tell, is it going to pay you in the future? By issuing bonds to cover what is owed to you.

The game is doomed from the beginning.

This is partly what Ukraine is over - the natural gas in Crimea. The 'civil war' is, as far as Putin is concerned, just to keep the media entertained.

The U.S. will implode before it can manifest as a true global war, though.

I've said it before, and I'll say it again - April of 2015. By the time April comes to a close, the U.S. will be unrecognizable (if not well before then - at the rate we're going we'll be trick-or-treating with bullets and frag grenades).

So it's a bad a thing, right?

 

[Ψ Veritas Ψ]

The answer to this requires a bit more understanding of what the "dollar" really is:

[video=youtube;iFDe5kUUyT0]https://www.youtube.com/watch?v=iFDe5kUUyT0[/video]

The reason why the dollar has not collapsed as of yet is because of Opec.

If you want to buy oil on the open market (and what nation looking to grow doesn't?) - then you have to do business with Opec in the form of U.S. treasury bonds - or "I.O.U.s" from the U.S. government. Alternatively, Federal Reserve bonds are treated as being identical to currency bonds.

This is the danger of all fiat currency systems. It is far easier to 'print more' than it is to figure out how to spend less. The end result is always hyper-inflation. The BRIC will suffer it, too, in due time - it's just that it is a different system with countries that have vaults filled with gold and growing societies - so investors are very willing to buy into the BRIC, particularly if it can get them oil and whoever buys the bond is able to see the amount stated on the bond paid to them (that wasn't also borrowed into existence).

Hopefully - it means a return to non-fiat currency systems backed by precious metals or fixed concepts like bitcoin that are not open to manipulation by legislative mandates. No legislative body can authorize the existence of more gold. At the very least - gold will always have a 'real' value worth the time, effort, and resources use to mine/sift and refine it. Though the rarity of it and universal acceptance of it in bartering pretty much guarantees its market value is frequently greater than the cost to introduce more to the market.

Anyway - the problem is that change, particularly one few people are prepared for, does not come easy - especially when that change cannot be prevented.

This will essentially put more pressure on the dollar as it means there will be options other than U.S. treasury bonds when it comes to purchasing oil. Why would you buy a promise to pay you back in 5 years from a country with a currency inflating in real-world values by nearly 5% each year (government inflation adjustments exclude commodities like fuel and food)? By the time you get paid back - you're looking at nearly a 30% reduction in purchasing power with the amount you are paid.

No sane individual would do that when the yield on the bond is 2%.

Which means the bond must promise a return of nearly 40% to make it worthwhile. If the government must issue bonds, currently, to meet its bills... then how, pray tell, is it going to pay you in the future? By issuing bonds to cover what is owed to you.

The game is doomed from the beginning.

This is partly what Ukraine is over - the natural gas in Crimea. The 'civil war' is, as far as Putin is concerned, just to keep the media entertained.

The U.S. will implode before it can manifest as a true global war, though.

I've said it before, and I'll say it again - April of 2015. By the time April comes to a close, the U.S. will be unrecognizable (if not well before then - at the rate we're going we'll be trick-or-treating with bullets and frag grenades).

Aim64C. The human encyclopedia.

 

[Aim64C]

So it's a bad a thing, right?

To say it is "bad" implies that the current situation is "good."

Both are 'bad.'

But simply trying to prevent the BRIC from taking over isn't going to result in less bad, either.

We're just going from one form of bad to another form of bad.

I see it as a good thing, as it ultimately means the end of an evil system. That said - it will be called a bad thing because it will bring a very rude end to the current illusion of prosperity that America lives within. It will force people to deal with reality and that is often considered a bad thing in our society.

So, again, I think it will ultimately pave the way to good and better things. We just have to tear the old roadway out, first in order to go back and do things right.

 

[Aim64C]

Aim64C. The human encyclopedia.

Well, I do have a lot in common with encyclopedias.

Physically, I resemble a human... but my behavior, perspective, and thoughts bear only a cursory resemblance to the majority of how other people think and behave.

I generally like to assume I'm some kind of alien monster that devours souls, born into this world to destroy it out of frustration. I will devise a means of perpetual energy and turn the planet into a second sun, or something.

Or maybe I'll create self-replicating robots to give the complacent fools in developed nations something to worry about other than creating rights for transgendered people who then decide they are homosexual. It's all dildos and latex until the erector-set-doll-spider from Toy Story jumps on your face and starts screeching.

 

[GhostProject]

To say it is "bad" implies that the current situation is "good."

Both are 'bad.'

But simply trying to prevent the BRIC from taking over isn't going to result in less bad, either.

We're just going from one form of bad to another form of bad.

I see it as a good thing, as it ultimately means the end of an evil system. That said - it will be called a bad thing because it will bring a very rude end to the current illusion of prosperity that America lives within. It will force people to deal with reality and that is often considered a bad thing in our society.

So, again, I think it will ultimately pave the way to good and better things. We just have to tear the old roadway out, first in order to go back and do things right.

I like how you put it, replacing one bad with another. I do not view it as a "good" thing however, but more of a neutral inevitable. It was a bad plan the U.S created awhile ago, that certainly had no chance of succeeding over any long period. Calling this good however, I cannot due, being a citizen of the U.S

But it was bound to happen. We'll see how this action affects the near future..

 

[Ψ Veritas Ψ]

Well, I do have a lot in common with encyclopedias.

Physically, I resemble a human... but my behavior, perspective, and thoughts bear only a cursory resemblance to the majority of how other people think and behave.

I generally like to assume I'm some kind of alien monster that devours souls, born into this world to destroy it out of frustration. I will devise a means of perpetual energy and turn the planet into a second sun, or something.

Or maybe I'll create self-replicating robots to give the complacent fools in developed nations something to worry about other than creating rights for transgendered people who then decide they are homosexual. It's all dildos and latex until the erector-set-doll-spider from Toy Story jumps on your face and starts screeching.

I certainly agree on that. The "western" Goverment spends too much time worrying about Sexual Rights, and the freedom to Fornicate, all the while people are dying everywhere, poverty, famine, and desease is destroying souls and creating even more monsters/problems/disasters. All the while, they are worried about how good someone feels about their sexuality. Ludicrous.

and the Eastern Goverments think mostly of themselves, and feed off the peoples freedom, it certainly is a shitty world.

 

[Lana Del Taka]

To say it is "bad" implies that the current situation is "good."

Both are 'bad.'

But simply trying to prevent the BRIC from taking over isn't going to result in less bad, either.

We're just going from one form of bad to another form of bad.

I see it as a good thing, as it ultimately means the end of an evil system. That said - it will be called a bad thing because it will bring a very rude end to the current illusion of prosperity that America lives within. It will force people to deal with reality and that is often considered a bad thing in our society.

So, again, I think it will ultimately pave the way to good and better things. We just have to tear the old roadway out, first in order to go back and do things right.

Hm, i see. Thanks.