Now, the end of the petrodollar system has been a long time coming, of course. It’s been a major goal of America’s strategic competitors for years. In 2017, China and Russia created the petroyuan so that its partners could trade for oil without using dollars. However, the petroyuan did not unseat the petrodollar in the six intervening years. 80% of oil transactions remained in USD. Why?
*Saudi Arabia, the linchpin of the petrodollar system, continued to insist on using dollars in its transactions.
*The Chinese continued to be reliant on trade with the US to fuel their economy, and thus could not risk destroying the system that made the US dollar valuable.
*The US has a proven track record of using military force to support the petrodollar, and with Donald Trump in charge — known to Chinese citizens as “Emperor Trump” for his vigorous policies — the Chinese were reluctant to “fuck around and find out.”
Now those conditions have changed.
One of the main things holding the dollar in place as a reserve currency (which is the main reason a national currency as debt-ridden as the US Dollar has value) is that oil has been largely traded in dollars to this point.
As that changes, the worth of the dollar ceases to be artificially propped up.
I expect the bottom to fall out of the US economy as the petrodollar fails. What we've seen so far (lockdowns, bailouts, and all) is NOTHING compared to what's to come.
I don't know if there is a solution. The overvaluing of the dollar is due to external structural factors, like US military power and petroleum being traded in dollars. As those factors are removed, what's to keep a fiat currency afloat?
I know Ron Paul talked about backing money with gold and silver as well as ending the Fed. Granted that would cause chaos as well but we may be better off on the other side. But also consider at some point a technology will be more efficient than oil
Retrenching the dollar is impossible without the US government regaining control over the power of the mint-- something that's impossible. The 'federal' reserve isn't Federal, and has no reserves.
Yes. A gold/silver standard would stem the fiat currency inflation problem; it would also make the status quo fractional reserve banking impossible. Therefore, it will never happen.
I expect a push to Digital Central Bank Currencies tied to social credit systems; a boot stamping the face of the poor, forever.
But also consider at some point a technology will be more efficient than oil
It's already come and been abandoned: Nuclear fission.
I see the elites opting to build solar & wind infrastructure to monopolize after oil peaks. They'd rather rule over the ruins than lose control of the future.
I'd propose using nuclear as the spearhead of a transition to a hydrolysis/liquid hydrogen infrastructure, which could bridge into superconductors and a supergrid. I imagine liquid hydrogen pipelines cooling superconductors being a prerequisite for some future fusion technology becoming feasible as a primary energy source for the planet.
That kind of planning requires planning 7 generations ahead and our 'elites' are more concerned with lining their pockets and visiting Little St. James-style hedonistic theme-parks.
It pains me to think how much we could’ve accomplished had we taken nuclear power more seriously back in the 40s and 50s. I believe you are right. I’d love to abolish the Fed but it is a tentacle of a larger beast.
Orbital solar was going to go into full production as far as infrastructure by the mid '70s. Entire project was killed by Congress in '72. A megawatt for half what we pay for a kilowatt...
I see the reserve currency status as more of a bonus. You see, other countries (who don't operate reserve currencies) have valuable fiat currency. Dollars would be less valuable if you could buy oil in yuan, but they wouldn't be worthless.
Compared to what the Fed does creating money, the impact of yuan-oil won't be that much. I don't even see that change causing a 25% inflation in US currency, something that the government has caused over the past couple of years.
From the article:
One of the main things holding the dollar in place as a reserve currency (which is the main reason a national currency as debt-ridden as the US Dollar has value) is that oil has been largely traded in dollars to this point.
As that changes, the worth of the dollar ceases to be artificially propped up.
I expect the bottom to fall out of the US economy as the petrodollar fails. What we've seen so far (lockdowns, bailouts, and all) is NOTHING compared to what's to come.
What do you think the solution is? Federal reserve doesn’t help I imagine
I don't know if there is a solution. The overvaluing of the dollar is due to external structural factors, like US military power and petroleum being traded in dollars. As those factors are removed, what's to keep a fiat currency afloat?
I know Ron Paul talked about backing money with gold and silver as well as ending the Fed. Granted that would cause chaos as well but we may be better off on the other side. But also consider at some point a technology will be more efficient than oil
Retrenching the dollar is impossible without the US government regaining control over the power of the mint-- something that's impossible. The 'federal' reserve isn't Federal, and has no reserves.
Yes. A gold/silver standard would stem the fiat currency inflation problem; it would also make the status quo fractional reserve banking impossible. Therefore, it will never happen.
I expect a push to Digital Central Bank Currencies tied to social credit systems; a boot stamping the face of the poor, forever.
It's already come and been abandoned: Nuclear fission.
I see the elites opting to build solar & wind infrastructure to monopolize after oil peaks. They'd rather rule over the ruins than lose control of the future.
I'd propose using nuclear as the spearhead of a transition to a hydrolysis/liquid hydrogen infrastructure, which could bridge into superconductors and a supergrid. I imagine liquid hydrogen pipelines cooling superconductors being a prerequisite for some future fusion technology becoming feasible as a primary energy source for the planet.
That kind of planning requires planning 7 generations ahead and our 'elites' are more concerned with lining their pockets and visiting Little St. James-style hedonistic theme-parks.
It pains me to think how much we could’ve accomplished had we taken nuclear power more seriously back in the 40s and 50s. I believe you are right. I’d love to abolish the Fed but it is a tentacle of a larger beast.
Amen.
Orbital solar was going to go into full production as far as infrastructure by the mid '70s. Entire project was killed by Congress in '72. A megawatt for half what we pay for a kilowatt...
Why did they not approve it?
It's as if some extraterrestrials are deliberately hampering our civilization from developing further...
Yeah. It feel's like we're running face first into the reasons behind Fermi's Paradox.
Maintaining an effective high-technology civilization generationally turns out to be hard.
Trump had the right answer for all of this. Have an economic war by being the best economy.
I see the reserve currency status as more of a bonus. You see, other countries (who don't operate reserve currencies) have valuable fiat currency. Dollars would be less valuable if you could buy oil in yuan, but they wouldn't be worthless.
Compared to what the Fed does creating money, the impact of yuan-oil won't be that much. I don't even see that change causing a 25% inflation in US currency, something that the government has caused over the past couple of years.