Saudi Arabia ends petrodollar agreement: What it means for the USD, Bitcoin, and gold

[Vi-va]

Again this is a great example of the mentality of the Chinese with everything in the perspective of “China against the World”

The world is not living “on edge”. It is you guys.

Again, this is a great example of the mentality of you with everything in the perspective of “China against the World”

China has no interest against the world at all, we are not Soviets. We care about our own business and protect our own interests. I think that's the same principle as Trump, isn't it?

 

[Pakistan Space Agency]

Recommend Ray Dalio

Another conspiracy theorist to sell his books?

 

[Vi-va]

Another conspiracy theorist to sell his books?

You never heard of him? I am a little surprised.



As of May 2024, Bridgewater Associates, the world's largest hedge fund, had $124 billion in assets. The firm invests in various asset classes, including equities, fixed income, commodities, and currencies, and is known for its macroeconomic analysis and forecasting expertise. Some of Bridgewater's top holdings include:

• iShares Trust - iShares Core S&P 500 ETF (US:IVV)
• iShares, Inc. - iShares Core MSCI Emerging Markets ETF (US:IEMG)
• Alphabet Inc. (US:GOOGL)
• The Procter & Gamble Company (USG)
• NVIDIA Corporation (US:NVDA)

He doesn't need to sell books to make a living.

 

[Hamartia Antidote]

Again, this is a great example of the mentality of you with everything in the perspective of “China against the World”

China has no interest against the world at all, we are not Soviets. We care about our own business and protect our own interests. I think that's the same principle as Trump, isn't it?

The only people thinking the US is going to attack Canada is the Chinese due to this constant mentality of yours.

It isn’t going to happen.

 

[Vi-va]

The only people thinking the US is going to attack Canada is the Chinese due to this mentality of yours.

It isn’t going to happen.

War Plan Red

I didn't say there is a plan to invade Canada right now. But the U.S. won't tolerate Canada joining Soviet/Russian camp and Canada knew it very well.

 

[Hamartia Antidote]

War Plan Red

I didn't say there is a plan to invade Canada right now. But the U.S. won't tolerate Canada joining Soviet/Russian camp and Canada knew it very well.

Lol! Neither will the Canadians

Is this after North Korea joins NATO?

 

[Vi-va]

Neither will the Canadians

Of course, they are not as dumb as Ukrainians, or Vietnamese in 1979.

You see, Vietnam is playing well with both the U.S. and China now.

 

[Vi-va]

Lol! Neither will the Canadians

Is this after North Korea joins NATO?

oh, you are really interesting. North Korea desperately want to join NATO. But how about South Korea? U.S. has made the choice decades ago.

 

[EugeneP]

Most of the people pontificating on this agreement haven't read a shred of it. This agreement was signed in 1974 when the price of oil had quadrupled throwing many countries into economic crises due to balance of payment problem. At the same time, oil exporting countries were accumulating huge surpluses and wanted a way to invest them safely. An arrangement was made to exchange these funds for U.S. treasury debt that was (and is) the most trusted debt in the world. Part of these funds were recycled through IMF and World Bank to help countries in economic distress. There was also the need by the Gulf states to acquire increased security due to fear of takeover by forces sympathetic to communism. After all, Middle eastern countries are characterized by extreme difference in wealth between ruling and privileged class vs. the ordinary people and those living in countries without oil.

The world is much richer now; there is no balance of payment crisis in most countries in spite of higher oil prices. There is no 1974 like Cold War fear. Oil exporting states have stronger security now and don't feel threatened by popular uprising due to economic discontent. The agreement, if it had not 'expired', would have outlived its purpose.

 

[Vi-va]

Most of the people pontificating on this agreement haven't read a shred of it. This agreement was signed in 1974 when the price of oil had quadrupled throwing many countries into economic crises due to balance of payment problem. At the same time, oil exporting countries were accumulating huge surpluses and wanted a way to invest them safely. An arrangement was made to exchange these funds for U.S. treasury debt that was (and is) the most trusted debt in the world. Part of these funds were recycled through IMF and World Bank to help countries in economic distress. There was also the need by the Gulf states to acquire increased security due to fear of takeover by forces sympathetic to communism. After all, Middle eastern countries are characterized by extreme difference in wealth between ruling and privileged class vs. the ordinary people and those living in countries without oil.

The world is much richer now; there is no balance of payment crisis in most countries in spite of higher oil prices. There is no 1974 like Cold War fear. Oil exporting states have stronger security now and don't feel threatened by popular uprising due to economic discontent. The agreement, if it had not 'expired', would have outlived its purpose.

As long as the U.S. can:

1. Keep the dollar value for the long run
2. Manage goverment deficit well
3. Remain the hegemony
4. Does not abuse the power of reserve currency

The KSA and the Gulf States may keep using the dollar as the sole currency in exchange for stability and security.

None of the above 4 requirements are met.

 

[EugeneP]

As long as the U.S. can:

1. Keep the dollar value for the long run
2. Manage goverment deficit well
3. Remain the hegemony
4. Does not abuse the power of reserve currency

The KSA and the Gulf States may keep using the dollar as the sole currency in exchange for stability and security.

None of the above 4 requirements are met.

Another important criterion:
5. If an alternate currency has to be used, in lieu of or along with USD, it should be:
(a) At least as stable as USD
(b) Have as large liquidity
(c) Acceptable to a wide swath of countries.

At present, the Euro and Japanese Yen serve the role to some extent. But not significantly better. EU zone has economic and monetary concerns similar to U.S. and Japan has other problems in addition.

 

[Vi-va]

Another important criterion:
5. If an alternate currency has to be used, in lieu of or along with USD, it should be:
(a) At least as stable as USD
(b) Have as large liquidity
(c) Acceptable to a wide swath of countries.

At present, the Euro and Japanese Yen serve the role to some extent. But not significantly better. EU zone has economic and monetary concerns similar to U.S. and Japan has other problems in addition.

I agree with most of your points.

Japan is a semi-sovereign state. Japan can NOT protect itself, which means NO endorsement of a reserve currency.

The E.U. may collapse, so I expect the euro to go weak and market share drops.

1. The Chinese RMB is backed by the military and the economy.
2. Relatively stable.
3. Limited liquidity.
4. Accepted by lots of countries, but mostly in bilateral trade instead of the capital market.
5. Major economies such as E.U. and U.S. are still reluctant to use RMB.
6. Limited usage in oil, gas, ore, and some other commodities.
7. China will open the capital market further and improve liquidity.

 

[EugeneP]

I agree with most of your points.

Japan is a semi-sovereign state. Japan can NOT protect itself, which means NO endorsement of a reserve currency.

The E.U. may collapse, so I expect the euro to go weak and market share drops.

1. The Chinese RMB is backed by the military and the economy.
2. Relatively stable.
3. Limited liquidity.
4. Accepted by lots of countries, but mostly in bilateral trade instead of the capital market.
5. Major economies such as E.U. and U.S. are still reluctant to use RMB.
6. Limited usage in oil, gas, ore, and some other commodities.
7. China will open the capital market further and improve liquidity.

Based on the size of economy, the Chinese currency deserves consideration. But that cannot happen without much freer trading of both currency and other monetary instruments i.e. bonds of various durations, derivatives, contracts etc., I don't think Chinese government can ever allow a U.S./E.U. style completely free market in monetary instruments. Hence, I don't see Chinese currency in routine international use (i.e. third country use - like Egypt buys beef from Argentina and pays in RMB because both Egypt and Argentina agree to it) in foreseeable future.

 

[Vi-va]

Based on the size of economy, the Chinese currency deserves consideration. But that cannot happen without much freer trading of both currency and other monetary instruments i.e. bonds of various durations, derivatives, contracts etc., I don't think Chinese government can ever allow a U.S./E.U. style completely free market in monetary instruments. Hence, I don't see Chinese currency in routine international use (i.e. third country use - like Egypt buys beef from Argentina and pays in RMB because both Egypt and Argentina agree to it) in foreseeable future.

You are right. China dislikes the idea of "U.S./E.U. style monetary instruments.".
China will balance the openness of the monetary system, which means a semi-open capital market.

It's good enough for China to secure trade relations with the rest of the world in the event of a U.S. blockage of the monetary system. And serve the role of a deterrent to let U.S. evaluate the effectiveness of blockage.

U.S. global industry market share is lower than 30 years ago and much lower than 50 years ago. Thanks to the reserve currency position.

A robust industry base plus semi-open capital market should serve China's national interest better than the "U.S./E.U. style monetary instruments."

 

[mulj]

Most of the people pontificating on this agreement haven't read a shred of it. This agreement was signed in 1974 when the price of oil had quadrupled throwing many countries into economic crises due to balance of payment problem. At the same time, oil exporting countries were accumulating huge surpluses and wanted a way to invest them safely. An arrangement was made to exchange these funds for U.S. treasury debt that was (and is) the most trusted debt in the world. Part of these funds were recycled through IMF and World Bank to help countries in economic distress. There was also the need by the Gulf states to acquire increased security due to fear of takeover by forces sympathetic to communism. After all, Middle eastern countries are characterized by extreme difference in wealth between ruling and privileged class vs. the ordinary people and those living in countries without oil.

The world is much richer now; there is no balance of payment crisis in most countries in spite of higher oil prices. There is no 1974 like Cold War fear. Oil exporting states have stronger security now and don't feel threatened by popular uprising due to economic discontent. The agreement, if it had not 'expired', would have outlived its purpose.

It is matter of control not wealth,