One aspect of the topic we cover here is the status of the US dollar as the world's leading reserve currency. This is because if the US dollar were to lose that status it would indicate that major monetary system change is underway and that is what we watch for here. In a new article appearing in Sputnik News (Russian publication), we get evidence that there is an effort being made by Russia and China to move away from a monetary system dominated by the US dollar. Below are some quotes from the article and then a few added comments.
------------------------------------------------------------------------------------------------"After the West imposed economic sanctions against Moscow, Russia and Beijing established a powerful energy alliance which changed the global oil market. In addition to increasing trade operations with oil and gas, the two countries are set to challenge dominance of the US dollar in setting prices for crude.
Petro-yuan is a strategic payment tool which would facilitate switching to a multipolar monetary systematic which would include various currencies and reflect the global balance of power, Mexican economist Ariel Noyola Rodriguez wrote in an article for the foreign affairs analysis website Voltaire Network (hit translate to read the linked article in english)."
. . . . .
"But, this strategic energy alliance has one long-term goal. Moscow and Beijing turned oil supplies into the channel to switch to a multipolar monetary system. Western sanctions are pushing Russia to exclude dollar and euro transactions from their trade operations, for safety.
As a result, China has been paying for Russian oil and gas in yuan since mid-2015. This fact has been confirmed by Gazprom Neft, the oil-producing subsidiary of Gazprom."
. . . . .
"Many geo-economic powers understand that in order to build a stable monetary system de-dollarization is needed," Rodriguez assumed."
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My added comments: Now and then it's good to look at publications in Russia and China to get a feel for how they see the global monetary system. When you follow this topic it becomes clear that they would prefer to see a new system where the US dollar is not the leading global reserve currency. What will be interesting to follow is whether or not Russia and China eventually get behind a move for the SDR to replace the US dollar or if they simply promote making the yuan more important. This process tends to move slowly so expect changes to be gradual unless another major global financial crisis speeds things up.
Also, what role gold might play in all this is a hot topic of conversation lately and I will do a new article on that coming up in June.
Also, what role gold might play in all this is a hot topic of conversation lately and I will do a new article on that coming up in June.
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