Author: cestmoi

Crude Oil Priced in RMB?   [Copy link] 中文

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Post time 2017-10-15 03:33:01 |Display all floors
RMB will be the major reserve currency in a few years.
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Post time 2017-10-15 04:46:30 |Display all floors
This post was edited by sfphoto at 2017-10-15 05:05
Jaaja Post time: 2017-10-14 20:15
Oil is going to run out, then what? In my opinion it is sort-sighted to think that valuing oil in so ...
There are reasons why Saudis or others do not sell oil in RMB. PRC is still quite new and partially undeveloped country, and facing huge transformations in structures socially, economically and politically, and risks on both national and international level. Nobody wants to bet on PRC or their currency in this situation, at least not while the alternative is USD.

Those reasons are not why oil is traded in USD and not in RMB. Although being a developing country or undergoing structural changes pose geopolitical risks, those reasons do not deter global markets from using the RMB as an international trade and settlement currency. In fact, the main reason why oil is traded in USD is geopolitical: the Arabs agreed to accept ONLY the USD for their oil in return for US guarantees to offer military "protection" in the Middle East. This "Arab Oil/US military" deal is called the Petrodollar regime. For as long as the Arabs need US military "protection", then they'll continue to use the USD. However, in the event of a US military withdrawal from the Middle East, then the Arabs will seek that "protection" from another military superpower, most likely Russia, inspite of its status as a developing country.






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Post time 2017-10-15 10:33:42 |Display all floors
sfphoto Post time: 2017-10-15 04:46
Those reasons are not why oil is traded in USD and not in RMB. Although being a developing country ...
those reasons do not deter global markets from using the RMB as an international trade and settlement currency


While I agree about your argument about petrodollar regime, it would make little sense to trade and settle deals in RMB and then immediately exchange it to USD for long term reserve, just because RMB is not trusted for that - and at the moment (or the foreseeable future) can't even be freely exchanged.

Even if the petrodollar regime suddely disappeared, the reasons why RMB will not replace USD remain.

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Post time 2017-10-15 11:41:20 |Display all floors
This post was edited by tedbrent at 2017-10-15 11:43
sfphoto Post time: 2017-10-15 04:46
Those reasons are not why oil is traded in USD and not in RMB. Although being a developing country ...

  From my perspective, the richest nations and or  gilded people  in the Middle East need America's military presence to protect them and their assets; these nations would be in thrall to Islamic fundamentalism if America were to pull its troops out of this region. Which would mean all the Middle East Kingdoms would be toppled, replaced by hard-line Islamism which preaches the conception that Islam believers should work together to build a new Muslim kingdom stretching from the Middle East to Chinese provinces where local residents are said to be Muslim believers as well.

  Do you know what does that mean? You think China is going to be a safe place once America decides to withdraw its troops from the Middle East?  I'd venture to say only Muslim terrorists would love to see this.

  RMB is not an international trade and settlement currency yet, in spite of China's strident calls to make Yuan the world's reserve currency and  renminbi's  entry into IMF basket might pose a challenge to  the global dominance of the US dollar.  Yet China's economy is not going strong as you think; China's total debt rose to a record 237 per cent of gross domestic product  last year, according to The Financial Times; China's stock market is still a casino aimed to gank gullible Chinese investors.


  Who would trust Chinese financiers?

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Post time 2017-10-15 11:43:58 |Display all floors
  From my perspective, the richest nations and or  gilded people  in the Middle East need America's military presence to protect them and their assets; these nations would be in thrall to Islamic fundamentalism if America were to pull its troops out of this region. Which would mean all the Middle East Kingdoms would be toppled, replaced by hard-line Islamism which preaches the conception that Islam believers should work together to build a new Muslim kingdom stretching from the Middle East to Chinese provinces where local residents are said to be Muslim believers as well.

  Do you know what does that mean? You think China is going to be a safe place once America decides to withdraw its troops from the Middle East?  I'd venture to say only Muslim terrorists would love to see this.

  RMB is not an international trade and settlement currency yet, in spite of China's strident calls to make Yuan the world's reserve currency and  renminbi's  entry into IMF basket might pose a challenge to  the global dominance of the US dollar.  Yet China's economy is not going strong as you think; China's total debt rose to a record 237 per cent of gross domestic product  last year, according to The Financial Times; China's stock market is still a casino aimed to gank gullible Chinese investors.


  Who would trust Chinese financiers?

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Post time 2017-10-15 11:58:47 |Display all floors
Jaaja Post time: 2017-10-15 10:33
While I agree about your argument about petrodollar regime, it would make little sense to trade  ...

  That's not gonna happen. China's financial system is prone to all kinds of financial risks, even though it's a closed-off one, say, rising public debts, shadow banking, inside trading and most of all, real estate bubble, which is still unchecked despite having received repeated warnings from the central government.

  If these domestic financial issues can't be solved, then it's piffle to say RMB will replace the U.S. dollar as a global currency, what with China's financial system is still too weak to withstand another financial upheaval that hit America back to 2008.

  Don't forget that China's property market carries more "water" than America, in the words of the Chinese language.

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Post time 2017-10-15 12:03:07 |Display all floors
cwdy Post time: 2017-10-15 03:33
RMB will be the major reserve currency in a few years.

  China's financial system is going to implode if Chinese banksters keep using China's financial markets to rook the Chinese people.

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