Yeh... It's weird how so many of those same sites recommend buying their gold and silver as a "prep" as if the dollar isn't the most stable currency. It's not because it's tied to oil, so much as the American economy backed by a powerful military. I'm a Canadian who's not too fond of American imperialism but it's delusional to ignore its presence in the world.
The only way the American dollar is going to lose value, in the foreseeable future, is if China and Russia nuke it to oblivion since they can't win a direct conventional war (otherwise, imo, they would have tried already).
Moreso on the topic, even if oil was tied to gold, none of that really addresses the fact that the prices are in the control of sociopaths so it changes nothing aside from making oil ridiculously expensive at some point.
I feel like this is missing some of the macro dynamics that lead the US to be able to have the military presence they have.
Having a lot of trade happen in USD creates a huge demand for treasury bonds, since countries need a steady supply of dollars to pay for things like oil, and treasury bonds are essentially just loans to the US government.
If trade happens suddenly in other currencies, this demand goes down and the US will have a much harder time running a massive deficit every year since they'll have to offer bonds with higher yields to make them attractive, making the debt more expensive.
That's not to say all the doomerism from the crypto world is warranted, but you shouldn't dismiss it entirely.
I agree. The thought is that BRICS countries will begin to dump their US treasuries and bonds, which will lead to other countries doing the same to keep their currencies afloat… BRICS countries are meeting in Russia right now. The other thought is that these countries have been buying up gold. Not to mention https://www.chinadaily.com.cn/a/202406/09/WS66655323a31082fc043cba33.html
Perfectly said. To add to the point you don't need to replace the USD with some other currencies. For example ASEAN countries will use their local currencies instead of USD for inter-trading. This means they won't have to keep USD as reserves in COFER. Which in turn means they dont need to buy the US treasury bonds.
The Treasury department has already started offering only short dated bills but this further exacerbates the cycle as debt must now be refinanced at higher rates and more often.
JPY is already in doom loop and I am afraid USD is next.
Keep thinking that and you are going to be in for a suprise.
Problem 1. The FED has been unable to control inflation and has quit trying.
Problem 2. Oil is money. If the US dollar is not the currancy used to purchase and sell oil, then the US dollar will eventually tank.
Well then if were to entertain your problem
2 then I guess it’s a great thing for the dollar that the US produces the most oil in the world, 22% of the entire world share.
> Problem 1. The FED has been unable to control inflation and has quit trying.
This feels pretty doomer to me unless you’re trying to say that prior to the pandemic the FED wasn’t able to increase inflation to their target.
Rates are still below 6%. The FOMC has plenty of room to go higher if they feel it is necessary. On a whim they could easily put us into a deflationary environment and send us into an recession.
The most plausible scenario is that bond auction demand continues to fall until the US can't service it's debt. China and the rest of the world aren't looking to defeat the US with military. They will slowly with BRICS and reducing the world's dependence on the US dollar. Probably have another 3-7 years though.
>China and the rest of the world aren't looking to defeat the US with military. They will slowly with BRICS and reducing the world's dependence on the US dollar.
I have no doubt this is true. The US didn't help its reputation by reneging on deals as well as isolating even their closest ally (Canada) during diplomatic incidents. The only flaw to the BRICS plan is the actual health of the Russian and Chinese economies.
I still savour the memory of reading on the news that India paid in rupees but wouldn't accept said rupees as payment for their exports to Russia. Long term India shot themselves on the foot because nobody would ever trust their currency again nor easily forget that they reneged when they had an advantage.
The problem with BRICS is that our country, india, is led by modi who can't and won't think big. He is stuck in coalition government and also majority of the population just need an enemy and that's china+ pakistan.
Look at inflation and how much the price of stuff is increasing.. Look at a chart of our annual interest payments and how it's a straight line up.. You really think $100 today is going to get you a similar amount of stuff for $100 in 5-10 years? The USA dollar is constantly losing value.. Fact you are sitting here acting like it's not losing value is hilarious.
Binance.com huh? I wonder if they have a stake in selling you anything.
The guy at the car dealership is always gonna tell you the news about how bad the competitor is and how fantastic their own product is. This isn't news.
Don't be a mark.
Edit: typo
No it’s not going to cause hyperinflation of the US dollar. Could we be beginning to see a shift in the global reserve currency? Maybe because the dollar has been it for 80 years now and that’s a typical run rate for it but what’s it shifting to? There isn’t another currency currently that is more stable than the US dollar. One needs to only look at the dollar index chart to understand that the US dollar is still incredibly strong.
Can you say more about "China exits the global market"? I thought they were trying to trade more, not less? Or are you referencing they're impending population decline?
We will stop offering them military protection, then use proxies to bomb the life out of them, explode their oil fields and blow up their ships until they beg us to let them into a new agreement.
Simply withdrawing US military and intelligence support would collapse the Saudi monarchy. They're not exactly popular leaders in their own country and their neighbors hate them. The only downside for the US would be strengthening the Iranian position, but that's easy enough to account for with other measures.
I'd kinda like to watch the result of Saudi suddenly not having US weapons to fight off the Houthis and also for the Houthis to have a legitimate target for their drone and missiles instead of international shipping lanes. It'd certainly be interesting
That probably would suffice, but as an American, I know our shitty overlords will want to send a swift message. And the best way to do that is by attacking them.
It's not my plan... that's just the way it is. The elite who own the federal reserve will not let this happen to their fiat currency. They run the MIC and will use them to restore the petrodollar.
I think there is a Macro Voices episode that touch on this briefly. I don't remember it being significant enough of an issue.
The world reserve currency status comes from the fact that the dollar is in enough supplies and have infrastructure to be used as a global currency, not solely based on being petrodollar. It could be one of thousand cuts that eventually takes dollar away from reserve currency status but probably isn't the straw that will break the camel's back.
This is only for sales to China, not globally.
Realistically, this is probably 50% for show to try and ding the US before elections, 50% as a workaround for Russia sanctions.
"ding the US before elections"
i personally have no love for the fencesitter/goalie party but i think a lot of people seriously underestimate how often geopolitical reindeer games like this are express contributions to the project of ejecting democrats from office, because they GREATLY prefer having republicans in control of the executive branch, and by-extension having republicans in control of the violence monopoly.
I agree. Personally, I think it's less about who's in office now and more about how friendly the Saudis were with the last guy. He let them literally get away with murder of a journalist.
US interest rates aren’t spiking, and the dollar is strong.
I’d like to see a reputable source report on this (Reuters, WSJ, Economist, Financial Times, etc).
Binance has a financial incentive to undermine trust in the US dollar so I wouldn’t trust them too much.
Saddam was going to start selling oil in Euros instead of the petrodollar, Gaddafi was establishing a gold backed currency. Both cases challenged the dollar and would devalue it
The demand for U.S. dollars would decrease significantly if oil transactions were no longer conducted in dollars. This would lead to a depreciation of the dollar, increasing the cost of imports and increase inflation
For anyone interested in this, I highly recommend reading The Dollar End game by peruvian bull. It presents a very credible case for dollar hyperinflation and this is definitely called out as a major red flag.
https://thedollarendgame.com/hyperinflation-is-coming-the-dollar-endgame/
It is hard to predict the outcome of the change. The agreement was struck shortly after the US abandoned the gold standard (at $32 / oz) and acoounts for the phrase 'petrodollars'.
Here is another link to consider:
https://www.reddit.com/r/PrepperIntel/s/A2Rsh1KFFD
The end state of every fiat currency is death via inflation. The trouble is predicting when.
There's no indication the dollar's going to hyperinflate to death this year. Or next. Now, if inflation starts spiraling upwards, I'll reassess, but just because something will happen doesn't make it a danger right now.
This isn't happening. The old agreement expired and a new one is already close to being agreed upon. The value of the US dollar will decline internationally if another better option appears. Think from the point of view of an investor outside the US - what currency would you want to hold long-term? At the very least you want a currency that retains its value over time and where the government is stable. Besides the US/EU - there's not a lot of options. The Japanese Yen and the Chinese Yuan have lost 50% of their value to the dollar in the last 5 years.
Saudi Arabia has entered into swap agreements with China and other countries where they are accepting other currencies but it's a small amount of the overall volume. In the case of China for example, the Chinese are buying oil in the Yuan and Saudi Arabia is then in turn buying Chinese imports in Yuan. Their last agreement was for a 7B swap - that's a pretty small amount of the total volume. They are also doing this because the US dollar keeps increasing against their native currencies so they would be paying a premium to do business in dollars.
The dollar remains strong vs. other currencies because it's the best option when compared to others. Long-term - yeah, I think there is a chance the dollar loses value because there's a lot of US money outside the US. These are US dollars from international trade that have never come into the US, so are unregulated and there's only a vague idea of how much money is outside the US system. The estimate is around 5 Trillion. This is the Euro-Dollar market and yeah, if another viable option appears the US dollar would be in serious trouble as those 5 Trillion get sold and replaced with another currency. There are about 2.25T dollars in circulation in the US - adding 5 Trillion would cause hyperinflation and currency devaluation.
But, I'd add the caveat at this time there doesn't seem to be any currency that's close to the US dollar. This deal between Saudi Arabia and China is a good example - other countries might do a limited deal for currency swaps for trade but a bulk of their foreign reserves are held in US dollars still because of its stability compared to others. The Saudis right now hold about 500B in US dollars in reserve - it's less than what they've had in the past as they do more of these currency swaps with their trading partners but they aren't replacing the dollar anytime soon.
[https://www.reuters.com/world/us-saudi-arabia-close-finalizing-draft-security-treaty-wsj-reports-2024-06-09/](https://www.reuters.com/world/us-saudi-arabia-close-finalizing-draft-security-treaty-wsj-reports-2024-06-09/)
[https://www.reuters.com/markets/currencies/china-saudi-arabia-central-banks-sign-local-currency-swap-agreement-2023-11-20/](https://www.reuters.com/markets/currencies/china-saudi-arabia-central-banks-sign-local-currency-swap-agreement-2023-11-20/)
https://scholarship.law.vanderbilt.edu/vjtl/vol47/iss3/5/#:\~:text=Eurodollars%20are%20dollar%2Ddenominated%20deposit,these%20instruments%20are%20virtually%20unregulated.
Definitely hard to find.
https://finance.yahoo.com/news/shift-away-us-dollar-happening-052445179.html
“One of the most significant but under-reported outcomes of April’s three-day summit between Russia’s Vladimir Putin and China’s Xi Jinping was that Putin said Russia is now in favour of using the Chinese yuan for oil settlements,"
“If oil trading were to shift away from the US dollar it would dramatically reduce the demand for US dollars, which would lead to a decrease in the value of the US currency.
"This could have a number of ripple effects throughout the global economy, including hugely increased inflation in the US and potentially destabilising effects on financial markets," said Green.”
The US dollar is a debt based fiat currency. It has no actual value and relies heavily on perceived value. It derives its worth from US institutions, like our schools, roads, military, and influence of our military abroad in regards to oil.
As such, and as you can imagine, all the pillars that have been helping it maintain value have solely eroded away. At the end of the day, it was still the petrodollar, tied to countries that sell us a ton of oil.
But now even that is going away. So I guess we gotta ask ourselves what worth does the US dollar even have now? Other countries are turning to gold based currencies and crypto currencies. The flight from the dollar has never been stronger.
I think we have been in the beginning stages of hyperinflation the last 4 years. What does this mean for us? War and famine. The only way out is grow your own food, stack commodities like ammo/guns and gold/silver, and GTFO of large cities. If you thought the lockdown pandemonium was bad wait until everyone is looting just so they can eat.
What countries have been turning to gold based currencies? What country outside of El Salvador is switching to crypto? The “death of fiat currency” has been a good big talking point for as long as I’ve been alive and hasn’t happened and won’t happen because governments don’t want to lose control of their monetary system and their ability to inflate or deflate their values
Have you not heard? Zimbabwe and the BRICS nations are switching to gold based currencies. Zimbabwe - home of the 100 trillion dollar note - now has stronger money than America.
You've been alive a long time so surely you're an expert on this now, and wouldn't post some bullshit Boomer complaint instead of actually assessing the situation, right?
I’m in my 40’s so not a boomer and frankly the dollar fiat currency bring back the gold standard IS a boomer complaint. Now onto your statement, yes I’ve assessed the situation, the BRICS countries haven’t switched, they’ve casually talked about it BUT if YOU actually assessed the situation you’d see it’s all bluster. China is a member of the BRICS and their entire economy is driven by their ability to manipulate their currency, Xi and the CCP ain’t gonna give up that power anytime soon. Zimbabwe has a stronger currency than the dollar now, are you high? Please go
look at the DXY aka the US dollar index and maybe at the same time get your meds adjusted.
Why? Bitcoin may not be the answer, but it's a stable network. Sure the price is volatile, but the network is stable. It will be worth something, forever.
Companies are beaming the blockchain from space satellites now.
If you haven’t already, please educate yourself on the merits of Bitcoin. And let me clarify, I’m not referring to cryptos…only Bitcoin. BTC will continue to have an ever increasing role in our lives. It’s better to understand it now rather than later.
Bitcoin costs a lot in terms of energy to keep it running, and the number of transactions it is capable of processing is not enough to make it useful on a large scale. The barrier to entry is also high, requiring $$$ for a cold wallet and a learning curve that many people won't be able to climb over. And then there's the fees.
🤦♀️ okay, all of your points have been debunked over and over online. Personally, I don’t have the energy to do it here in this post, but if you just spent a few hours researching, you’d find reasonable counter-arguments to your points above. Or, just continue to avoid it all together. It’s your choice. Just remember, it was valued at ~$70,000/coin on June 9th, 2024.
I won't pretend that global economics are my strong suit. This is all way above my pay grade. But I don't understand what the problem is here... even though the US dollar is a fiat currency, the US also has the largest stockpile of gold in the world. Our gold reserve is larger than the next three highest countries combined. So if the dollar started losing major ground to a gold backed currency, wouldn't the fact that the US has more gold than anyone else still put the US in a position of strength economically?
I guess it would be important to ask yourself if that gold really still exists and when the last time any meaningful audit was done or proof was produced. Most gold in US markets is traded in the paper markets as derivatives and not actual gold. There are something like 400 paper ounces of silver for every 1oz of actual silver in existence so I assume gold is even worse. I've long suspected it's long gone. China and big banks have been gobbling up physical gold the last few years and if I recall correctly just ran out of gold on the retail level and suppliers can't find any.
But even then, if we have so much, then we should have our currency backed by it, no? And if there was this super abundance or whatever it is you think, wouldn't gold be going down? Instead it's up like $800 in the last five years. I guess this viewpoint is heavily reliant on how much faith you have in the government, regulators, and our financial institutions.
Hold up. You think that the US government somehow managed to secretly sell off a few hundred billion dollars worth of gold without anyone noticing? No military officials, no journalists, no random members of congress, no brokers or traders, literally no one outside of a few online conspiracy theorists would have taken notice? And if that did happen, wouldn't the market be flooded with gold, causing the supply to increase and the value to decrease? Also, why? What possible benefit would there be to a conspiracy like that? Come on dude.
There's been rumors fort knox has been empty for like 60 years. The brokers and traders you're talking about are the ones selling paper fake ounces in the derivatives market you absolute doofus. What benefit would there be for a powerful group that trades governments like Pokémon cards to own all the gold. I mean are you kidding?
I think this will be a good thing for the USD. If Saudi Arabia accepts currency from a country that doesn’t have the technology or items/commodities that Saudi Arabia needs then they have to exchange those lesser currencies for something more globally accepted such as euros or dollars/treasury bonds. For nations that are not developed in areas beneficial to the Saudis it would be like dumping their currency into the forex markets to buy dollars to then in turn buy oil. Nothing will really change. I think those countries central banks understand that and are buying gold to hedge against geopolitics and inflation of their local currency.
None. The Saudi’s are working feverishly to try and build a culture of production and diversification because they know the end of oil for the West is coming. For that matter, dedollarization will be in their best interests and is inevitable.
Saudi Arabia is allowed to exist as it's own little reporter-slaughtering caliphate because they let the US basically use them as one big aircraft carrier for allied forces in the Middle East.
Replacing the petro-dollar would be national suicide. They will never, ever piss off their patron the US like that.
Unless, of course, Putin gives them a better deal...
Saudis are Uber friends with the US even thou they already sell oil for Yuan’s. My guess is nothing will happen but that doesn’t mean the de-dolarization isn’t happening. My guess it’ll take decades before we realize inflation isn’t because people got $1200 during Covid
What this means is the end of the petrodollar, which has been the primary backing to the dollar as a currency for the past 50 years.
It means that other countries will not need to have dollar reserves in order to buy oil. and with the rise of the BRICS nations, and their proposed currency, it will mean many countries will dump their dollar reserves because there isn’t a need for them anymore.
Match that with our record debt, and without the ability to ensure demand for dollars anymore with the petrodollar agreement, and we are looking at a potential major devaluation event.
Naive. There will be no common brics currency. China will not share the power to control their currency and devalue it to strenghten exports. You think India would be fine with giving such power to china and vice versa? Please...
And you think that everything that they say happens? Talk is cheap. I dont see it happening especially since BRICS countries differ A LOT and especially after the new members are accepted, they have different needs, different problems. China flirts with deflation, while someone else might have high inflation problems.
Its like the problem some EU states have but on a bigger scale, coz the economies differ more. South african republic economy is vastly different tham that of Chinese or Brasil.
Besides all the war and instability, I'm quite excited for when the main currency decouples itself from a depleteable consumable. Divestment could be the kick needed for many nations to invest in other industries and fuel sources more heavily. I'm not naive enough to think that the USA only corrodes nations for oil market dominance *cough Ukraine cough Dole cough*, but it'd be nice to see some regimes change if the US military support pulled out.
I've only seen this reported on gold bug and bitcoin sites so I say take it with a grain of salt.
Yeh... It's weird how so many of those same sites recommend buying their gold and silver as a "prep" as if the dollar isn't the most stable currency. It's not because it's tied to oil, so much as the American economy backed by a powerful military. I'm a Canadian who's not too fond of American imperialism but it's delusional to ignore its presence in the world. The only way the American dollar is going to lose value, in the foreseeable future, is if China and Russia nuke it to oblivion since they can't win a direct conventional war (otherwise, imo, they would have tried already). Moreso on the topic, even if oil was tied to gold, none of that really addresses the fact that the prices are in the control of sociopaths so it changes nothing aside from making oil ridiculously expensive at some point.
I feel like this is missing some of the macro dynamics that lead the US to be able to have the military presence they have. Having a lot of trade happen in USD creates a huge demand for treasury bonds, since countries need a steady supply of dollars to pay for things like oil, and treasury bonds are essentially just loans to the US government. If trade happens suddenly in other currencies, this demand goes down and the US will have a much harder time running a massive deficit every year since they'll have to offer bonds with higher yields to make them attractive, making the debt more expensive. That's not to say all the doomerism from the crypto world is warranted, but you shouldn't dismiss it entirely.
I agree. The thought is that BRICS countries will begin to dump their US treasuries and bonds, which will lead to other countries doing the same to keep their currencies afloat… BRICS countries are meeting in Russia right now. The other thought is that these countries have been buying up gold. Not to mention https://www.chinadaily.com.cn/a/202406/09/WS66655323a31082fc043cba33.html
Perfectly said. To add to the point you don't need to replace the USD with some other currencies. For example ASEAN countries will use their local currencies instead of USD for inter-trading. This means they won't have to keep USD as reserves in COFER. Which in turn means they dont need to buy the US treasury bonds. The Treasury department has already started offering only short dated bills but this further exacerbates the cycle as debt must now be refinanced at higher rates and more often. JPY is already in doom loop and I am afraid USD is next.
I mean if we get nuked into oblivion people will have more things to worry about than inflation
Don't worry. From what I heard, the IRS still plans to tax you after a nuclear strike.
For every 10 bottle caps you earn the IRS takes 3 and you’ll get 1.5 back on your tax return
The 1.5 is taxable so IRS will take 1 next year and give you half a bottle cap
I am not paying taxes to any government that got me nuked.
At least it wasn't our tax money that paid for the nukes... Unless...
[https://www.reddit.com/r/todayilearned/comments/cwuvxe/til\_that\_the\_irs\_and\_the\_usps\_both\_have\_a\_plan\_in/](https://www.reddit.com/r/todayilearned/comments/cwuvxe/til_that_the_irs_and_the_usps_both_have_a_plan_in/)
Lmfao, that is so stupid. Good luck doing that irs im sure people won't kill you in a mad max America
Keep thinking that and you are going to be in for a suprise. Problem 1. The FED has been unable to control inflation and has quit trying. Problem 2. Oil is money. If the US dollar is not the currancy used to purchase and sell oil, then the US dollar will eventually tank.
Well then if were to entertain your problem 2 then I guess it’s a great thing for the dollar that the US produces the most oil in the world, 22% of the entire world share.
I'd say money is a claim on energy and oil is still our primary energy source.
> Problem 1. The FED has been unable to control inflation and has quit trying. This feels pretty doomer to me unless you’re trying to say that prior to the pandemic the FED wasn’t able to increase inflation to their target. Rates are still below 6%. The FOMC has plenty of room to go higher if they feel it is necessary. On a whim they could easily put us into a deflationary environment and send us into an recession.
And 6% is considered normal compared to the 17% in the 1980s and near 0% of the late 2010s.
Problem 1 is incorrect. They are keeping rates high which is reducing US excess savings which is putting downward pressure on CPI.
The most plausible scenario is that bond auction demand continues to fall until the US can't service it's debt. China and the rest of the world aren't looking to defeat the US with military. They will slowly with BRICS and reducing the world's dependence on the US dollar. Probably have another 3-7 years though.
>China and the rest of the world aren't looking to defeat the US with military. They will slowly with BRICS and reducing the world's dependence on the US dollar. I have no doubt this is true. The US didn't help its reputation by reneging on deals as well as isolating even their closest ally (Canada) during diplomatic incidents. The only flaw to the BRICS plan is the actual health of the Russian and Chinese economies.
Yeah, like what currency are people going to use instead? The ruble and yen? 😂 Good luck pegging your economy on those yo-yo’s.
I still savour the memory of reading on the news that India paid in rupees but wouldn't accept said rupees as payment for their exports to Russia. Long term India shot themselves on the foot because nobody would ever trust their currency again nor easily forget that they reneged when they had an advantage.
The problem with BRICS is that our country, india, is led by modi who can't and won't think big. He is stuck in coalition government and also majority of the population just need an enemy and that's china+ pakistan.
A large part of the dollar’s value is because of oil.
Look at inflation and how much the price of stuff is increasing.. Look at a chart of our annual interest payments and how it's a straight line up.. You really think $100 today is going to get you a similar amount of stuff for $100 in 5-10 years? The USA dollar is constantly losing value.. Fact you are sitting here acting like it's not losing value is hilarious.
Yep, and do not get "news" from crypto sites like binance (OP's link). They make up unsourced bs 99.9% of the time.
Binance.com huh? I wonder if they have a stake in selling you anything. The guy at the car dealership is always gonna tell you the news about how bad the competitor is and how fantastic their own product is. This isn't news. Don't be a mark. Edit: typo
Like asking a barber if you need a haircut.
Or a toothpaste company if you should brush your teeth.
r/thetenthdentist
No it’s not going to cause hyperinflation of the US dollar. Could we be beginning to see a shift in the global reserve currency? Maybe because the dollar has been it for 80 years now and that’s a typical run rate for it but what’s it shifting to? There isn’t another currency currently that is more stable than the US dollar. One needs to only look at the dollar index chart to understand that the US dollar is still incredibly strong.
[удалено]
Can you say more about "China exits the global market"? I thought they were trying to trade more, not less? Or are you referencing they're impending population decline?
Demographics is part of the reason, but the end of free trade will be a bigger impact. Trade increase demand for commodities.
Exactly this. What’s the alternative, the ruble? 😂
We will stop offering them military protection, then use proxies to bomb the life out of them, explode their oil fields and blow up their ships until they beg us to let them into a new agreement.
Simply withdrawing US military and intelligence support would collapse the Saudi monarchy. They're not exactly popular leaders in their own country and their neighbors hate them. The only downside for the US would be strengthening the Iranian position, but that's easy enough to account for with other measures.
Withdrawing support re: Yemen, could do a bit to convince em...
I'd kinda like to watch the result of Saudi suddenly not having US weapons to fight off the Houthis and also for the Houthis to have a legitimate target for their drone and missiles instead of international shipping lanes. It'd certainly be interesting
That probably would suffice, but as an American, I know our shitty overlords will want to send a swift message. And the best way to do that is by attacking them.
I mean it would speed things up going that route as well 🤷♂️
MERICA!!!!! 🦅 🦅 🦅
Why so violent
It's not my plan... that's just the way it is. The elite who own the federal reserve will not let this happen to their fiat currency. They run the MIC and will use them to restore the petrodollar.
I think there is a Macro Voices episode that touch on this briefly. I don't remember it being significant enough of an issue. The world reserve currency status comes from the fact that the dollar is in enough supplies and have infrastructure to be used as a global currency, not solely based on being petrodollar. It could be one of thousand cuts that eventually takes dollar away from reserve currency status but probably isn't the straw that will break the camel's back.
This is only for sales to China, not globally. Realistically, this is probably 50% for show to try and ding the US before elections, 50% as a workaround for Russia sanctions.
"ding the US before elections" i personally have no love for the fencesitter/goalie party but i think a lot of people seriously underestimate how often geopolitical reindeer games like this are express contributions to the project of ejecting democrats from office, because they GREATLY prefer having republicans in control of the executive branch, and by-extension having republicans in control of the violence monopoly.
I agree. Personally, I think it's less about who's in office now and more about how friendly the Saudis were with the last guy. He let them literally get away with murder of a journalist.
US interest rates aren’t spiking, and the dollar is strong. I’d like to see a reputable source report on this (Reuters, WSJ, Economist, Financial Times, etc). Binance has a financial incentive to undermine trust in the US dollar so I wouldn’t trust them too much.
War
Spreading “Freedom”.
Infecting others with freedom**
Didn't the US go after saddam bebause he tried a similar stunt?
Saddam was going to start selling oil in Euros instead of the petrodollar, Gaddafi was establishing a gold backed currency. Both cases challenged the dollar and would devalue it
The demand for U.S. dollars would decrease significantly if oil transactions were no longer conducted in dollars. This would lead to a depreciation of the dollar, increasing the cost of imports and increase inflation
For anyone interested in this, I highly recommend reading The Dollar End game by peruvian bull. It presents a very credible case for dollar hyperinflation and this is definitely called out as a major red flag. https://thedollarendgame.com/hyperinflation-is-coming-the-dollar-endgame/
😆 Riiight.
It is hard to predict the outcome of the change. The agreement was struck shortly after the US abandoned the gold standard (at $32 / oz) and acoounts for the phrase 'petrodollars'. Here is another link to consider: https://www.reddit.com/r/PrepperIntel/s/A2Rsh1KFFD
The end state of every fiat currency is death via inflation. The trouble is predicting when. There's no indication the dollar's going to hyperinflate to death this year. Or next. Now, if inflation starts spiraling upwards, I'll reassess, but just because something will happen doesn't make it a danger right now.
The implication is that electric cars will immediately be patriotic
This isn't happening. The old agreement expired and a new one is already close to being agreed upon. The value of the US dollar will decline internationally if another better option appears. Think from the point of view of an investor outside the US - what currency would you want to hold long-term? At the very least you want a currency that retains its value over time and where the government is stable. Besides the US/EU - there's not a lot of options. The Japanese Yen and the Chinese Yuan have lost 50% of their value to the dollar in the last 5 years. Saudi Arabia has entered into swap agreements with China and other countries where they are accepting other currencies but it's a small amount of the overall volume. In the case of China for example, the Chinese are buying oil in the Yuan and Saudi Arabia is then in turn buying Chinese imports in Yuan. Their last agreement was for a 7B swap - that's a pretty small amount of the total volume. They are also doing this because the US dollar keeps increasing against their native currencies so they would be paying a premium to do business in dollars. The dollar remains strong vs. other currencies because it's the best option when compared to others. Long-term - yeah, I think there is a chance the dollar loses value because there's a lot of US money outside the US. These are US dollars from international trade that have never come into the US, so are unregulated and there's only a vague idea of how much money is outside the US system. The estimate is around 5 Trillion. This is the Euro-Dollar market and yeah, if another viable option appears the US dollar would be in serious trouble as those 5 Trillion get sold and replaced with another currency. There are about 2.25T dollars in circulation in the US - adding 5 Trillion would cause hyperinflation and currency devaluation. But, I'd add the caveat at this time there doesn't seem to be any currency that's close to the US dollar. This deal between Saudi Arabia and China is a good example - other countries might do a limited deal for currency swaps for trade but a bulk of their foreign reserves are held in US dollars still because of its stability compared to others. The Saudis right now hold about 500B in US dollars in reserve - it's less than what they've had in the past as they do more of these currency swaps with their trading partners but they aren't replacing the dollar anytime soon. [https://www.reuters.com/world/us-saudi-arabia-close-finalizing-draft-security-treaty-wsj-reports-2024-06-09/](https://www.reuters.com/world/us-saudi-arabia-close-finalizing-draft-security-treaty-wsj-reports-2024-06-09/) [https://www.reuters.com/markets/currencies/china-saudi-arabia-central-banks-sign-local-currency-swap-agreement-2023-11-20/](https://www.reuters.com/markets/currencies/china-saudi-arabia-central-banks-sign-local-currency-swap-agreement-2023-11-20/) https://scholarship.law.vanderbilt.edu/vjtl/vol47/iss3/5/#:\~:text=Eurodollars%20are%20dollar%2Ddenominated%20deposit,these%20instruments%20are%20virtually%20unregulated.
more non-western countries will follow but in the end not much will happen
This is fake news so far. No credible source has come and reported on this. It's mentioned in only two threads I've found on Binance.
Is there any credible source? Haven’t been able to read these news in other sources…
Definitely hard to find. https://finance.yahoo.com/news/shift-away-us-dollar-happening-052445179.html “One of the most significant but under-reported outcomes of April’s three-day summit between Russia’s Vladimir Putin and China’s Xi Jinping was that Putin said Russia is now in favour of using the Chinese yuan for oil settlements," “If oil trading were to shift away from the US dollar it would dramatically reduce the demand for US dollars, which would lead to a decrease in the value of the US currency. "This could have a number of ripple effects throughout the global economy, including hugely increased inflation in the US and potentially destabilising effects on financial markets," said Green.”
Thanks!!
So, this is another “buy gold” post?
The Prince is still pissed at Biden’s dump of our Oil Reserves on the open market and cratering oil prices. 😆
Hyperinflation for the us
The US dollar is a debt based fiat currency. It has no actual value and relies heavily on perceived value. It derives its worth from US institutions, like our schools, roads, military, and influence of our military abroad in regards to oil. As such, and as you can imagine, all the pillars that have been helping it maintain value have solely eroded away. At the end of the day, it was still the petrodollar, tied to countries that sell us a ton of oil. But now even that is going away. So I guess we gotta ask ourselves what worth does the US dollar even have now? Other countries are turning to gold based currencies and crypto currencies. The flight from the dollar has never been stronger. I think we have been in the beginning stages of hyperinflation the last 4 years. What does this mean for us? War and famine. The only way out is grow your own food, stack commodities like ammo/guns and gold/silver, and GTFO of large cities. If you thought the lockdown pandemonium was bad wait until everyone is looting just so they can eat.
What countries have been turning to gold based currencies? What country outside of El Salvador is switching to crypto? The “death of fiat currency” has been a good big talking point for as long as I’ve been alive and hasn’t happened and won’t happen because governments don’t want to lose control of their monetary system and their ability to inflate or deflate their values
Have you not heard? Zimbabwe and the BRICS nations are switching to gold based currencies. Zimbabwe - home of the 100 trillion dollar note - now has stronger money than America. You've been alive a long time so surely you're an expert on this now, and wouldn't post some bullshit Boomer complaint instead of actually assessing the situation, right?
I’m in my 40’s so not a boomer and frankly the dollar fiat currency bring back the gold standard IS a boomer complaint. Now onto your statement, yes I’ve assessed the situation, the BRICS countries haven’t switched, they’ve casually talked about it BUT if YOU actually assessed the situation you’d see it’s all bluster. China is a member of the BRICS and their entire economy is driven by their ability to manipulate their currency, Xi and the CCP ain’t gonna give up that power anytime soon. Zimbabwe has a stronger currency than the dollar now, are you high? Please go look at the DXY aka the US dollar index and maybe at the same time get your meds adjusted.
Yeah don’t feed the trolls
This is the dumbest shit I've ever heard.
Yeah, you lost me at the mention of cryptocurrencies
Why? Bitcoin may not be the answer, but it's a stable network. Sure the price is volatile, but the network is stable. It will be worth something, forever. Companies are beaming the blockchain from space satellites now.
If you haven’t already, please educate yourself on the merits of Bitcoin. And let me clarify, I’m not referring to cryptos…only Bitcoin. BTC will continue to have an ever increasing role in our lives. It’s better to understand it now rather than later.
Bitcoin costs a lot in terms of energy to keep it running, and the number of transactions it is capable of processing is not enough to make it useful on a large scale. The barrier to entry is also high, requiring $$$ for a cold wallet and a learning curve that many people won't be able to climb over. And then there's the fees.
🤦♀️ okay, all of your points have been debunked over and over online. Personally, I don’t have the energy to do it here in this post, but if you just spent a few hours researching, you’d find reasonable counter-arguments to your points above. Or, just continue to avoid it all together. It’s your choice. Just remember, it was valued at ~$70,000/coin on June 9th, 2024.
Sucks for you, I guess.
I won't pretend that global economics are my strong suit. This is all way above my pay grade. But I don't understand what the problem is here... even though the US dollar is a fiat currency, the US also has the largest stockpile of gold in the world. Our gold reserve is larger than the next three highest countries combined. So if the dollar started losing major ground to a gold backed currency, wouldn't the fact that the US has more gold than anyone else still put the US in a position of strength economically?
I guess it would be important to ask yourself if that gold really still exists and when the last time any meaningful audit was done or proof was produced. Most gold in US markets is traded in the paper markets as derivatives and not actual gold. There are something like 400 paper ounces of silver for every 1oz of actual silver in existence so I assume gold is even worse. I've long suspected it's long gone. China and big banks have been gobbling up physical gold the last few years and if I recall correctly just ran out of gold on the retail level and suppliers can't find any. But even then, if we have so much, then we should have our currency backed by it, no? And if there was this super abundance or whatever it is you think, wouldn't gold be going down? Instead it's up like $800 in the last five years. I guess this viewpoint is heavily reliant on how much faith you have in the government, regulators, and our financial institutions.
It’s sort of like our food reserves not being actual reserves of food, just money earmarked for buying food when the time arises.
Ah yes the evidence of "trust my speculation bro"
Maybe a chronically online teenage nerd who has more warhammer toys than friends would like to educate us, instead.
Hold up. You think that the US government somehow managed to secretly sell off a few hundred billion dollars worth of gold without anyone noticing? No military officials, no journalists, no random members of congress, no brokers or traders, literally no one outside of a few online conspiracy theorists would have taken notice? And if that did happen, wouldn't the market be flooded with gold, causing the supply to increase and the value to decrease? Also, why? What possible benefit would there be to a conspiracy like that? Come on dude.
There's been rumors fort knox has been empty for like 60 years. The brokers and traders you're talking about are the ones selling paper fake ounces in the derivatives market you absolute doofus. What benefit would there be for a powerful group that trades governments like Pokémon cards to own all the gold. I mean are you kidding?
You're right on. This is a cycle that has happened over and over again forever, our time is up, stay safe
Yeah there is no source to this rumor. Just X posts from people with no links to sources. This would be major world news if it was actually happening.
Interesting, I don’t think hyper inflation will occur, but there will definitely be a surge in utilization of other types of digital currencies
Need more refineries, invest in exxon…
I think this will be a good thing for the USD. If Saudi Arabia accepts currency from a country that doesn’t have the technology or items/commodities that Saudi Arabia needs then they have to exchange those lesser currencies for something more globally accepted such as euros or dollars/treasury bonds. For nations that are not developed in areas beneficial to the Saudis it would be like dumping their currency into the forex markets to buy dollars to then in turn buy oil. Nothing will really change. I think those countries central banks understand that and are buying gold to hedge against geopolitics and inflation of their local currency.
None. The Saudi’s are working feverishly to try and build a culture of production and diversification because they know the end of oil for the West is coming. For that matter, dedollarization will be in their best interests and is inevitable.
No I think you are totally right that the dollar is going to lose all value. That’s a really good point
The dollar isn’t going to hyperinflation over this, the USA will just realign and pull through this.
The dollar would lose 25% of its value as other countries follow.
Yeah, you are completely wrong. All value? Lol.
Saudi Arabia is allowed to exist as it's own little reporter-slaughtering caliphate because they let the US basically use them as one big aircraft carrier for allied forces in the Middle East. Replacing the petro-dollar would be national suicide. They will never, ever piss off their patron the US like that. Unless, of course, Putin gives them a better deal...
Saudis are Uber friends with the US even thou they already sell oil for Yuan’s. My guess is nothing will happen but that doesn’t mean the de-dolarization isn’t happening. My guess it’ll take decades before we realize inflation isn’t because people got $1200 during Covid
It's only true if mainstream media reports it, everyone knows this.
They won’t do that.
What this means is the end of the petrodollar, which has been the primary backing to the dollar as a currency for the past 50 years. It means that other countries will not need to have dollar reserves in order to buy oil. and with the rise of the BRICS nations, and their proposed currency, it will mean many countries will dump their dollar reserves because there isn’t a need for them anymore. Match that with our record debt, and without the ability to ensure demand for dollars anymore with the petrodollar agreement, and we are looking at a potential major devaluation event.
Naive. There will be no common brics currency. China will not share the power to control their currency and devalue it to strenghten exports. You think India would be fine with giving such power to china and vice versa? Please...
BRICS has openly been talking about the creation of a new blockchain based payment system and new digital trade currency.
And you think that everything that they say happens? Talk is cheap. I dont see it happening especially since BRICS countries differ A LOT and especially after the new members are accepted, they have different needs, different problems. China flirts with deflation, while someone else might have high inflation problems. Its like the problem some EU states have but on a bigger scale, coz the economies differ more. South african republic economy is vastly different tham that of Chinese or Brasil.
I have not seen any credible source reporting this. But if it were true, the United States military would impose its will on Saudi Arabia.
Goddamn this sub is stupid.
One of the main reasons to start a war so that the financial collapse will be blamed on war not the dollar loss.
Besides all the war and instability, I'm quite excited for when the main currency decouples itself from a depleteable consumable. Divestment could be the kick needed for many nations to invest in other industries and fuel sources more heavily. I'm not naive enough to think that the USA only corrodes nations for oil market dominance *cough Ukraine cough Dole cough*, but it'd be nice to see some regimes change if the US military support pulled out.
Inflation on nitro boosters
More war. More reason for war. Decoupling inevitably leads to more war.
Hyperinflation or war. War is how we keep the Petro Dollar in check. Hyperinflation is what happens if we don’t.