Article

2022-03-15 Economy

Saudis Consider Accepting Yuan Instead of Dollars for Chinese Oil Sales: Report

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Posted by Thing From Snowy Mountain 2022-03-15 13:40|| || Front Page|| [12 views ] Top
File under: Govt of Saudi Arabia

#1 They have considered the implications on the yuan of the latest covid exercises in China?

Posted by Glenmore 2022-03-15 14:32|| 2022-03-15 14:32|| Front Page Top

#2 If China has to close their factories for another month they're still ahead of us who don't have any.

Posted by Thing From Snowy Mountain 2022-03-15 14:52|| 2022-03-15 14:52|| Front Page Top

#3 WSJ article is behind the paywall but here's the gist. The Saudis are royally pissed about the Iran deal, about Biden not helping them vs Houthis etc and are serious about diversifying out of dollar assets -- probably the way the Kuwaitis do with the Kuwaiti Dinar (KWD).

If this happens, then a "block" will be "taken out of the wall" of the "supremacy of the US dollar in the international financial system, which Washington has relied on for decades to print Treasury bills it uses to finance its budget deficit." Economist Gal Luft, an expert on the dollar, says if that happens, "The wall will begin to collapse."

Pegged to a basket of currencies, the KWD is the world's most valuable currency and, while not 100% invulnerable to sanctions, has great strength and flexibility.

This Saudi expert @aliShihabi on Twitter sums it up:

"Freezing Russia's foreign exchange reserves must have scared the daylights out of the Chinese (and others) who hold massive reserves in dollars. Any doubts countries had about the need to diversify into Yuan & other currencies/ geographies would have ended with that huge step."

Ali Shihabi adds:
"Ultimately countries will have to diversify more into non-dollar and also acquire material exposure to China/Asia in currency and investments. Also who knows maybe even #bitcoin. Diversification is the only sound and safe strategy for any large investor let alone a country."

Posted by Hunter Bidens Laptop 2022-03-15 15:34|| 2022-03-15 15:34|| Front Page Top

#4 If this is Lex/Merrick, he ain't wrong.

Posted by Glenmore 2022-03-15 15:42|| 2022-03-15 15:42|| Front Page Top

#5 ^ I'm not and it's not my opinion, it's just obvious. Common sense. Everyone sees this coming

Who knows, maybe some adults in Washington will take over from Biden and pull us back from the brink, halt the Iran deal, stop the sanctions, start helping the Saudis with their problems. But probably not.

Posted by Hunter Bidens Laptop 2022-03-15 15:45|| 2022-03-15 15:45|| Front Page Top

#6 Uncertainty is the enemy of any fiat money. The US was already fueling that uncertainty with the nonstop explosion of debt going back to the W Boosh years. Add the scattershot "sanctions everywhere" approach of the Bidet misministration and the US dollar stool is now very wobbly.

Posted by M. Murcek 2022-03-15 15:47|| 2022-03-15 15:47|| Front Page Top

#7 Meanwhile the Chinese stock market is crashing. May I recommend Swiss Francs (that was the go to in the 70's crash).

Posted by Procopius2k 2022-03-15 20:58|| 2022-03-15 20:58|| Front Page Top

#8 If we straighten out our national finances and stop the hysterics, all those diversifying away will diversify themselves back to the dollar. In the meantime, if I were living elsewhere, I’d be pondering other options, too. Luxembourg, maybe. Not crypto, though, because that’s too easily manipulated for my taste.

This is Gods of the Copybook Headings stuff.

Posted by trailing wife 2022-03-15 22:25|| 2022-03-15 22:25|| Front Page Top

#9 This is Gods of the Copybook Headings stuff.

Indeed. It's like ol' Rudyard had psychotic powers or something. Given that we have been evolving civilization since the Younger Dryas, you'd think we would have the basic plan down by now. Maybe we are just slow learners. It will be different this time!

Posted by SteveS 2022-03-15 22:52|| 2022-03-15 22:52|| Front Page Top

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