RI... Oil exporters such as Russia and Iran will soon be able to bypass the US dollar — and convert their yuan into gold.
It begins. Via OilPrice.com:
The world’s top oil importer, China, is preparing to launch a crude oil futures contract denominated in Chinese yuan and convertible into gold, potentially creating the most important Asian oil benchmark and allowing oil exporters to bypass U.S.-dollar denominated benchmarks by trading in yuan, Nikkei Asian Review reports.
The crude oil futures will be the first commodity contract in China open to foreign investment funds, trading houses, and oil firms. The circumvention of U.S. dollar trade could allow oil exporters such as Russia and Iran, for example, to bypass U.S. sanctions by trading in yuan, according to Nikkei Asian Review. To make the yuan-denominated contract more attractive, China plans the yuan to be fully convertible in gold on the Shanghai and Hong Kong exchanges.
Last month, the Shanghai Futures Exchange and its subsidiary Shanghai International Energy Exchange, INE, successfully completed four tests in production environment for the crude oil futures, and the exchange continues with preparatory works for the listing of crude oil futures, aiming for the launch by the end of this year.
“The rules of the global oil game may begin to change enormously,” Luke Gromen, founder of U.S.-based macroeconomic research company FFTT, told Nikkei Asia Review.
advertisement Yes, the rules are changing. Welcome to a truly multi-polar world, where nations no longer have to be shackled to the dollar:
China’s pricing of assets in yuan – coupled with the Hong Kong Stock Exchange’s plan to sell physical gold contracts priced in the currency – will create a system where countries can sidestep the US banking system, Tinker said in an Aug 30 note.
“Having accepted payment for oil or gas in yuan, the seller, be it Russia or Saudi Arabia or anyone else for that matter, does not have to worry about having excess yuan, they can simply trade it back into gold,” Tinker said.
“We are moving to a multi-polar world.”
Poster Comment:
Mike • Fantastic! It's the beginning of the end of the petro dollar which means, the end for the US dollar in general. The US uses the demand for petro dollars to print fake money to save their own butts and finance their war machine. But now, a hell of a lot of petro dollar will find its way back to the US preventing them to print more as the US dollar will start to crumble. Even the Saudis will eventually join the new club to save their own ass.
What does that mean for the US? Let me put it this way...dropping a nuclear bomb in the middle of the US wouldn't compare to what they are about to deal with from within.
The US empire is destroying itself and for the same reasons previous ones did. Fun times ahead!
Tatarewicz • Smart move, China. When oil exporter gets yuan will more likely buy China product with it rather than incur conversion fee. Means more jobs in China.