AI
Tuesday, January 16, 2018 9:38:25 PM
TIME TO BUY GOLD...?.. a real currency war, not just our Fed of other Central Banker's manipulation... an Oil Yuan backed with Gold
I saw where someone said the oil Yuan backed with gold could happen this week BUT I don't find any confirmation...see the last paragraph below...
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As Bloomberg notes, as the world’s largest energy consumer and an increasing source of investment capital for oil-producing nations, China has an interest in using its own currency rather than that of a geopolitical competitor.
One hurdle for setting up a rival to Brent or West Texas Intermediate: Overseas oil producers and traders would need to swallow China’s capital controls and penchant for occasional market interventions.
"It is not unreasonable to envision a world in which the overwhelming share of commodity contracts, especially for oil, are no longer denominated just in dollars," said Eswar Prasad, a former China division chief at the IMF.
But "the yuan’s role in global finance will ultimately be determined by the degree of commitment of Xi Jinping’s government to economic and financial market reforms."
Beijing is ready to step up the game. Soon China will launch a crude oil futures contract priced in yuan. This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan. Inbuilt in the move is a true Chinese win-win; the yuan - according to some - will be fully convertible into gold on both the Shanghai and Hong Kong exchanges.
The new triad of oil, yuan and gold is actually a win-win-win. No problem at all if energy providers prefer to be paid in physical gold instead of yuan. The key message is the US dollar being bypassed. In doing so China is effectively lobbing the first shot across the bow of the Petrodollar system, and more importantly, the key support of the USD in the international arena... setting the scene for the petroyuan. ...from ZeroHedge Dec. 13, 2017
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The new 55-page “America First” National Security Strategy (NSS)
https://www.counterpunch.org/2017/12/25/the-petro-yuan-bombshell/
drafted over the course of 2017, defines Russia and China as “revisionist” powers, “rivals”, and for all practical purposes strategic competitors of the United States.
The NSS stops short of defining Russia and China as enemies, allowing for an “attempt to build a great partnership with those and other countries”. Still, Beijing qualified it as “reckless” and “irrational.” The Kremlin noted its “imperialist character” and “disregard for a multipolar world”. Iran, predictably, is described by the NSS as “the world’s most significant state sponsor of terrorism.”
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https://sputniknews.com/analysis/201711101058998483-china-yuan-dollar-oil-futures/
"Now is just the right moment: Oil prices are low, supply exceeds demand and China is the largest consumer of oil," Cheng highlighted speaking to Sputnik China. "If we do not set the payments in yuan now, we will not learn how to influence prices and when the market situation changes and demand exceeds supply, we will be in a losing position."
"Settlements in renminbi will be convenient, because the 'petro-yuan' can then be converted into gold," Wang told Sputnik. "It is very good. After all, the Bretton Woods system was supposed to be tied to gold. Although [the dollar's convertibility into gold] was suspended [in 1971], gold still remains a solid commodity."
The Chinese scholar highlighted that given the instability in the global economy, the precious metal has taken on a new significance.
Wang noted that some countries, such as Russia, have already agreed to trade oil with China in yuan. He believes that gold-backed futures contracts will attract even more attention from global players.
While Russia has been receiving payments in yuan for oil supplies to China since June 2017, Venezuela has also jumped at the opportunity to nominate oil prices in the Chinese currency. The logic behind the move is clear: It is advantageous for some countries subjected to US sanctions to avoid transactions in dollars. All these countries — Russia, Iran and Venezuela — are major suppliers of crude.
Wang believes that even Saudi Arabia, which has been trading hydrocarbons in US dollars since the 1970s, as a result of an agreement struck by the Gulf monarchy and its neighbors with then President Richard Nixon, may soon switch to the yuan.
"The US will import less and less oil due to its 'shale revolution' while Chinese imports will not decline, on the contrary, it will grow," the Chinese scholar emphasized. "The number of cars [in China] will increase, the economy will develop, and energy consumption will grow. Therefore, it is not in Saudi Arabia's interest to lose the Chinese market."
Furthermore, in September 2017, the China Daily noted that "Saudi Arabia is willing to consider funding itself in Chinese yuan." According to the media outlet, "obtaining some funds in Chinese yuan will diversify Saudi Arabia's financing channels after it borrowed tens of billions of US dollars overseas last year."
In October, CNBC reported, citing Carl Weinberg, chief economist and managing director at High Frequency Economics that the Chinese may "compel" Riyadh to shift to yuan pricing of oil. The media outlet added that Saudi Arabia currently remains "at the crux of the petrodollar."
"Moving oil trade out of dollars into yuan will take right now between $600 billion and $800 billion worth of transactions out of the dollar," Weinberg estimated, as quoted by the media outlet.
China's decision to price crude in yuan using gold-backed futures is aimed at "dethroning" the dollar, Sri Jegarajah of CNBC wrote on October 24.
The journalist cited Gal Luft, co-director of the Institute for the Analysis of Global Security, a Washington-based think tank focused on energy security, who stressed that although the move has not become a "game changer" yet, it "is another indicator of the beginning of the glacial… decline of the dollar."
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Jan. 3, 2018 Petro-Yuan Looms - How China Will Shake Up The Oil Futures Market https://www.zerohedge.com/news/2018-01-03/petro-yuan-looms-how-china-will-shake-oil-futures-market
The "huge story",as Graticule's Adam Levinson called it, will, it appears, be a "wake up call" for the West that seems to happily be ignoring this potential bombshell that is China's looming launch of domestic oil futures trading.
Additionally, Levison warns Washington that besides serving as a hedging tool for Chinese companies, the contract will aid a broader Chinese government agenda of increasing the use of the yuan in trade settlement... and thus the acceleration of de-dollarization and the rise of the Petro-Yuan.
The Shanghai International Energy Exchange, a unit of Shanghai Futures Exchange, will be known by the acronym INE and will allow Chinese buyers to lock in oil prices and pay in local currency. Also, foreign traders will be allowed to invest -- a first for China’s commodities markets -- because the exchange is registered in Shanghai’s free trade zone. Even Bloomberg admits there are implications for the U.S. dollar’s well-established role as the global currency of the oil market...
When will trading begin?
According to the Shanghai-based news portal Jiemian, which cited an unidentified person from a futures company, trading is expected to start Jan. 18. Multiple rounds of testing have been carried out and all listing requirements met. The State Council, China’s cabinet, was said to have given its approval in December, one of the final regulatory hurdles. The push for oil futures gained impetus in 2017 when China surpassed the U.S. as the world’s biggest crude importer.
TIME TO BUY GOLD...?.. a real currency war, not just our Fed of other Central Banker's manipulation... an Oil Yuan backed with Gold
I saw where someone said the oil Yuan backed with gold could happen this week BUT I don't find any confirmation...see the last paragraph below...
----------------------------------------------------------------
As Bloomberg notes, as the world’s largest energy consumer and an increasing source of investment capital for oil-producing nations, China has an interest in using its own currency rather than that of a geopolitical competitor.
One hurdle for setting up a rival to Brent or West Texas Intermediate: Overseas oil producers and traders would need to swallow China’s capital controls and penchant for occasional market interventions.
"It is not unreasonable to envision a world in which the overwhelming share of commodity contracts, especially for oil, are no longer denominated just in dollars," said Eswar Prasad, a former China division chief at the IMF.
But "the yuan’s role in global finance will ultimately be determined by the degree of commitment of Xi Jinping’s government to economic and financial market reforms."
Beijing is ready to step up the game. Soon China will launch a crude oil futures contract priced in yuan. This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan. Inbuilt in the move is a true Chinese win-win; the yuan - according to some - will be fully convertible into gold on both the Shanghai and Hong Kong exchanges.
The new triad of oil, yuan and gold is actually a win-win-win. No problem at all if energy providers prefer to be paid in physical gold instead of yuan. The key message is the US dollar being bypassed. In doing so China is effectively lobbing the first shot across the bow of the Petrodollar system, and more importantly, the key support of the USD in the international arena... setting the scene for the petroyuan. ...from ZeroHedge Dec. 13, 2017
------------------------------------------------------------
The new 55-page “America First” National Security Strategy (NSS)
https://www.counterpunch.org/2017/12/25/the-petro-yuan-bombshell/
drafted over the course of 2017, defines Russia and China as “revisionist” powers, “rivals”, and for all practical purposes strategic competitors of the United States.
The NSS stops short of defining Russia and China as enemies, allowing for an “attempt to build a great partnership with those and other countries”. Still, Beijing qualified it as “reckless” and “irrational.” The Kremlin noted its “imperialist character” and “disregard for a multipolar world”. Iran, predictably, is described by the NSS as “the world’s most significant state sponsor of terrorism.”
------------------------------------------------------------
https://sputniknews.com/analysis/201711101058998483-china-yuan-dollar-oil-futures/
"Now is just the right moment: Oil prices are low, supply exceeds demand and China is the largest consumer of oil," Cheng highlighted speaking to Sputnik China. "If we do not set the payments in yuan now, we will not learn how to influence prices and when the market situation changes and demand exceeds supply, we will be in a losing position."
"Settlements in renminbi will be convenient, because the 'petro-yuan' can then be converted into gold," Wang told Sputnik. "It is very good. After all, the Bretton Woods system was supposed to be tied to gold. Although [the dollar's convertibility into gold] was suspended [in 1971], gold still remains a solid commodity."
The Chinese scholar highlighted that given the instability in the global economy, the precious metal has taken on a new significance.
Wang noted that some countries, such as Russia, have already agreed to trade oil with China in yuan. He believes that gold-backed futures contracts will attract even more attention from global players.
While Russia has been receiving payments in yuan for oil supplies to China since June 2017, Venezuela has also jumped at the opportunity to nominate oil prices in the Chinese currency. The logic behind the move is clear: It is advantageous for some countries subjected to US sanctions to avoid transactions in dollars. All these countries — Russia, Iran and Venezuela — are major suppliers of crude.
Wang believes that even Saudi Arabia, which has been trading hydrocarbons in US dollars since the 1970s, as a result of an agreement struck by the Gulf monarchy and its neighbors with then President Richard Nixon, may soon switch to the yuan.
"The US will import less and less oil due to its 'shale revolution' while Chinese imports will not decline, on the contrary, it will grow," the Chinese scholar emphasized. "The number of cars [in China] will increase, the economy will develop, and energy consumption will grow. Therefore, it is not in Saudi Arabia's interest to lose the Chinese market."
Furthermore, in September 2017, the China Daily noted that "Saudi Arabia is willing to consider funding itself in Chinese yuan." According to the media outlet, "obtaining some funds in Chinese yuan will diversify Saudi Arabia's financing channels after it borrowed tens of billions of US dollars overseas last year."
In October, CNBC reported, citing Carl Weinberg, chief economist and managing director at High Frequency Economics that the Chinese may "compel" Riyadh to shift to yuan pricing of oil. The media outlet added that Saudi Arabia currently remains "at the crux of the petrodollar."
"Moving oil trade out of dollars into yuan will take right now between $600 billion and $800 billion worth of transactions out of the dollar," Weinberg estimated, as quoted by the media outlet.
China's decision to price crude in yuan using gold-backed futures is aimed at "dethroning" the dollar, Sri Jegarajah of CNBC wrote on October 24.
The journalist cited Gal Luft, co-director of the Institute for the Analysis of Global Security, a Washington-based think tank focused on energy security, who stressed that although the move has not become a "game changer" yet, it "is another indicator of the beginning of the glacial… decline of the dollar."
---------------------------------------------------------------
Jan. 3, 2018 Petro-Yuan Looms - How China Will Shake Up The Oil Futures Market https://www.zerohedge.com/news/2018-01-03/petro-yuan-looms-how-china-will-shake-oil-futures-market
The "huge story",as Graticule's Adam Levinson called it, will, it appears, be a "wake up call" for the West that seems to happily be ignoring this potential bombshell that is China's looming launch of domestic oil futures trading.
Additionally, Levison warns Washington that besides serving as a hedging tool for Chinese companies, the contract will aid a broader Chinese government agenda of increasing the use of the yuan in trade settlement... and thus the acceleration of de-dollarization and the rise of the Petro-Yuan.
The Shanghai International Energy Exchange, a unit of Shanghai Futures Exchange, will be known by the acronym INE and will allow Chinese buyers to lock in oil prices and pay in local currency. Also, foreign traders will be allowed to invest -- a first for China’s commodities markets -- because the exchange is registered in Shanghai’s free trade zone. Even Bloomberg admits there are implications for the U.S. dollar’s well-established role as the global currency of the oil market...
When will trading begin?
According to the Shanghai-based news portal Jiemian, which cited an unidentified person from a futures company, trading is expected to start Jan. 18. Multiple rounds of testing have been carried out and all listing requirements met. The State Council, China’s cabinet, was said to have given its approval in December, one of the final regulatory hurdles. The push for oil futures gained impetus in 2017 when China surpassed the U.S. as the world’s biggest crude importer.
TIME TO BUY GOLD...?.. a real currency war, not just our Fed of other Central Banker's manipulation... an Oil Yuan backed with Gold
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