This past Monday, China introduced its new petro yuan as competition to America's longstanding petro dollar dominance. This is a super huge news story not getting as much media attention and analysis it deserves. I guess slur-slamming Trump and Russia is more important to the owners of America's monopolized media than highlighting the economic risks America and its people face as a nation.
According to Jeff Moore, senior analyst with Global Risk Insights, the potential of the petro yuan could eliminate annual worldwide dollar demand by $876 billion, no small drop in a bucket. With China being the world's largest importer of oil its leverage in the world oil economy is thus remarkable and therefore very bad news for the US petro dollar, especially when this gets coupled to the volatility of the Saudi Arabian economy and its transformation of government.
https://globalriskinsights.com/2018/03/yuan-vs-dollar-world-currency/
What's more, China's petro yuan currency holds the added benefit of being backed by an abundance of gold.
China is the world's number one gold producer. According to The World Atlas, as of January 4, 2018, China leads annual world gold production producing 455 metric tons yearly. For perspective, Australia produces 270, Russia 250, the US 209 and Canada 170.
Now factor in the rapidly increasing alliance of China and Russia, numbers one and three respectively in world gold production. Russia has accomplished two strong objectives under the leadership of Vladimir Putin: a) an extremely stronger military capacity; and, b) under very difficult conditions it managed to improved its economy despite US-imposed sanctions. Without question, Russia is flexing new military muscle in Syria and has served notice to America it is not weak at all.
China, meanwhile, the most populous nation on the planet, has managed to create The Chinese Dream which today leaves many of we Americans -- at least those of us who are aware of the difference -- wishing for the American Dream so many of us once shared. China's economic development has become a phenomenon to the planet. Not only has it built its own nation with middle class standards it's also been providing strong economic and development assistance to many third world nations.
Russia and China also have aligned to promote one of the greatest infrastructure projects -- emphasizing green technology -- in the history of civilization, the reopening of the ancient land and sea Silk Road trading routes, the Belt Road Initiative (BRI). This project will start in China and move throughout Russia down into Turkey to include the Cross-Shia Crescent on into The Stan and Lower Asian regions. I'm thinking the pressure will become so great even India and Europe will join. BRI has the potential to render the US, always reliant on military power to achieve its military objectives, as irrelevant.
Back to the petroyuan.
Prior to introduction of the petroyuan, the modern world has strongly relied on the US petrodollar. The petrodollar's past significance is well described by Christopher Doran, author of Making the World Safe for Capitalism: How Iraq Threatened the US Economic Empire and had to be Destroyed.
"In a nutshell, any country that wants to purchase oil from an oil producing country has to do so in U.S. dollars. This is a long standing agreement within all oil exporting nations, aka OPEC, the Organization of Petroleum Exporting Countries. The UK for example, cannot simply buy oil from Saudi Arabia by exchanging British pounds. Instead, the UK must exchange its pounds for U.S. dollars. The major exception at present is, of course, Iran.
"This means that every country in the world that imports oil—which is the vast majority of the world’s nations—has to have immense quantities of dollars in reserve."<<<
When the great Bob Dylan wrote his song The Times They Are A Changin' who knew then he was writing about the petro yuan!?!
It's time to recognize, as perceived in the folly world of the bully, there are new kids in the town. The combination of Russia's military might and China's comprehensive economic development strategy could soon see the US where it ultimately becomes the nation for which sanctions get imposed. This could become especially true if America doesn't now begin taming its military which traditionally has functioned as the lead force for America corporate-imposed wealth over other nations.
Finally, in today's world we're now see Russians playing chess and Chinese playing go. The US appears stuck in a game of checkers, wanting instead to roll the dice of war in a long shot chance the numbers will land well.
America can do better and it must do better. But it won't without new leadership. The two major political parties have become corrupted. We need change so radical it should have begun yesterday!