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Old 03-22-2012, 09:27 PM
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Default The beginning of the end of the (petro)dollar

Economic Collapse Blog has had a series of really good articles lately.

The latest one, titled: Saudi Arabia And China Team Up To Build A Gigantic New Oil Refinery - Is This The Beginning Of The End For The Petrodollar? really does a fantastic job of retelling the history of the "petrodollar"

Here's a couple article excerpts:

Quote:
Over the past several years, China has sought to aggressively expand trade with Saudi Arabia, and China now actually imports more oil from Saudi Arabia than the United States does. In February, China imported 1.39 million barrels of oil per day from Saudi Arabia. That was 39 percent higher than last February. So why is this important? Well, back in 1973 the United States and Saudi Arabia agreed that all oil sold by Saudi Arabia would be denominated in U.S. dollars. This petrodollar system was adopted by almost the entire world and it has had great benefits for the U.S. economy. But if China becomes Saudi Arabia's most important trading partner, then why should Saudi Arabia continue to only sell oil in U.S. dollars? And if the petrodollar system collapses, what is that going to mean for the U.S. economy?

Quote:
It will not happen overnight, but as the U.S. economy continues to get weaker it is inevitable that the rest of the world will continue to question why the U.S. dollar should automatically have such a dominant position in international trade.

Over the next few years, keep a close eye on Saudi Arabia.

When Saudi Arabia announces a move away from the petrodollar system, that will be a major trigger event for the global financial system and it will be a really, really bad sign for the U.S. economy.

The level of prosperity that we are enjoying today would not be possible without the petrodollar system. Once the petrodollar system collapses, a lot of our underlying economic vulnerabilities will be exposed and it will not be pretty.

Tough times are on the horizon. It is imperative that we all get informed and that we all get prepared.

But read the whole article. Highly informative and understandable!!
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Old 03-23-2012, 10:13 PM
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LOL,

Apparently I am my own thread killer.

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Old 03-24-2012, 09:18 AM
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As long as oil is denominated in dollars, we can print dollars(or "create" them electronically) and buy all the oil we
need. Guess what happens when dollars are no longer the currency accepted for oil?
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Old 03-24-2012, 09:22 AM
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In other news, Doc Fungcool has bugged out. Okey dokey
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Old 03-24-2012, 09:29 AM
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http://www.bbc.co.uk/news/business-17471095

Meanwhile, China is making deals to become the worlds reserve currency.

Quote:
China has been trying to promote the yuan as an alternative global reserve currency to the US dollar.
It has signed currency deals with many of its trading partners, including Hong Kong and Japan.
That has seen a rise in the amount of Chinese trade being settled in yuan instead of US dollars.
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Old 03-24-2012, 11:44 AM
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China has already hooked up with Brazil and Russia. Then, Japan and South Korea, although I don't know if those are completed. Just recently, Australia. And China is doing a lot of investing in various African countries.

China is taking a page from Japan's book: Japan achieved by trade after WW II everything she'd gone to war to get. The US is doing a lot of war but is losing out in the world markets. Seems to be a lesson there.
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