Wednesday, March 7, 2018

Alasdair Macleod Offers Comments on Upcoming Petro-Yuan Oil Contcact

This is some news we think is worth follwing since it appears that the so called Petro-Yuan oil contracts are expected to open trading later this month on March 26th. In the 3 minute video below (link to it here) Alasdair Macloead offers some comments on this event. Below the video I will have a few added comments.


Alasdair Macleod on Upcoming Petro-Yuan Oil Contract

My added comments: This upcoming event is attracting quite a bit of attention in both mainstream and alternative media sources. There is a wide range of views on the impact of this all the way from almost no impact at all to the beginning of the end of the so called "Petro-Dollar" era. 

In this video Mr. Macleod mentions that President Trump has now announced new tariffs on China and suggests that this may be part of this whole situation. I don't pretend to know what all may be involved with this, but here are a few bullet points we can list that do know to be true whether they tie to this event or not:

- China (and Russia) have been adding to their sovereign gold reserves at a heavy pace over the last several years for some reason and both are continuing to add to gold reserves
at substantial levels

- China and Russia have both stated publicly that they are interested in ways to bypass the US dollar in the future

- Russia is under sanctions from the US and now China is the target of new tariffs that some believe may escalate into a "trade war"

- Venezuela and Iran have recently expressed interest in trying to setup sovereign cryptocurrencies related to oil to perhaps avoid US sanctions

- most everyone agrees that one key to the US dollar assuming the role of global reserve currency is that most global oil trading contracts are priced in US dollars and settled in US dollars creating substantial global demand for US dollars

All of this bears watching closely this year. On top of the potential for conflct to arise over sanctions, tariffs, and currencies, we also still have North Korea lingering in the background. Obviously, there is lot going on between the US, China, Russia, and North Korea.

According to Jim Rickards, President Trump held off on imposing tariffs on China because he wanted them to help the US out in regards to North Korea. Jim says that China did not follow through on promises to do that and so now President Trump sees no reason to hold back on the tariffs he has wanted to impose for a long time and perhaps even label China as a "currency manipulator".  He offers more thoughts on the situation in this recent article.

All of this has the potential to create a lot of turmoil globally this year and certainly could upset world markets. These are the kinds of events we try to monitor here in case something does erupt that would ignite a new global crisis. Anything that disrupts the current monetary system could lead to major changes that we do try to watch for here.

On the one hand, the US economy seems to be pretty stable. The US stock market is near all time highs. Employment reports seem to be pretty good. There is record high business and consumer confidence. However, we still have to keep a careful eye on the events mentioned above along with the impact of further money tightening by the US Fed and other central banks. There are plenty of serious potential problems that could arise pretty quickly despite the relative calm that seems to exist for the time being.

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