China Just Shocked the World with Thier Strategy to Crush the US
China JUST SHOCKED The World With Their Insane STRATEGY To CRUSH The ENTIRE US
Tech Revolutions: 11-12-2022
The current pattern of dollar domination in oil pricing and trading dates back to 1974. This was in the stormy aftermath of the Arab Oil Embargo, the 1973 oil crisis, and the 1971 abandonment of dollar linkage to gold and fixed exchange rates for many currencies to the dollar.
Saudi Arabia agreed to price oil in dollars and retain reserves partly in Treasury bonds, in exchange for US military and political security and purchases of its oil.
Other oil exporters quickly followed. The Saudis also kept their currency pegged to the US dollar. The Mideast Gulf oil states became wealthier as a result of those "petrodollar" arrangements.
The US was able to finance large trade deficits with ease. A generally strong dollar encouraged the export of manufacturing from the US to China and other countries by making US goods relatively expensive.
Trading dollar-denominated oil and gas futures cemented the United States' position as the world's superpower
Members of the Shanghai Cooperation Group ,which is also known as the SCO; a key regional organization led by China and Russia, agreed on a road map for growing commerce in local currencies- at their recent summit in Uzbekistan.
For years, the SCO's economic plan has included a road map for using local currencies in commerce and creating alternative payment and settlement methods. This agenda is consistent with the group's most prominent members' individual policies, such as Russia's attempt to soften the blow of Western sanctions;
China's deteriorating relations with the US; India's use of nondollar currencies in its trade with Russia; and Iran's recent proposal for a single Shanghai Cooperation Group currency.
Chinese President Xi Jinping proposed addressing development deficits through regional integration. This was specifically by increasing the share of local currency settlements, strengthening the development of cross-border local-currency payment and settlement systems, and promoting the establishment of a Shanghai Cooperation Group Development Bank.
When speaking at the recent SCO summit, Xi avoided overtly discussing the geopolitical issue of US dollar dependence. His idea, however, underscored Chinese authorities' significant fears about the Chinese economy's vulnerability to US dollar dominance, as well as their determination to build other mechanisms to hedge against the risk of dollar domination.
According to a report in financial review; As the world's largest trading nation, China also believes the US printed so much pandemic-era money. These small changes in US Federal Reserve policy now have significant consequences for emerging markets, such as imported inflation, fiscal instability, and exchange rate volatility.
To limit its vulnerability to US sanctions; China would establish an economic sphere of influence anchored by the yuan and maybe its digital currency, the e-Chinese Yuan. Hard power and a military sphere of influence may follow eventually.
However, the global financial crisis of 2007 to 2008 reversed this movement of de-dollarization. Over the recent decade, no new breakthrough has emerged to challenge the dominance of the US dollar.
The currency is facing a fresh test as a rift between the United States and Saudi Arabia emerges.
Saudi Arabia is the world's largest crude oil exporter, accounting for 17.2% of worldwide exports. It was previously the largest supplier to the United States. Saudi Arabia emerged as a key US partner in the Middle East as a result of oil.
As you might be aware; OPEC is led by Saudi Arabia. Previously, this gave the US indirect control over world oil prices, which are denominated in dollars. This enabled successive American administrations to run massive trade deficits and take on cheap debt.
Since 1979, the Saudi Kingdom has served as a proxy for the United States against Iran. In recent years, the United States has increased shale oil output and increased its Strategic Petroleum Reserve. The United States imported an estimated 2 million barrels per day in the 1990s.
By 2021, this amount has decreased by 75% to just 500,000 barrels per day. Biden's most recent trip to the Middle East was a complete failure.