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China Challenges The US Dollar By Launching Petro-Yuan: Dollar’s Death Imminent?

Mac Slavo
March 26th, 2018
SHTFplan.com
Comments (35)

China is the world’s largest crude oil consumer, and its eyes are now on the rival United States’ currency, the dollar.  The Chinese have effectively challenged the dollar’s dominance by launching the petro-yuan, leading some to believe the US dollar’s collapse is all but imminent.

According to the South China Morning Post, China’s state-run media outlet, trading of the new oil futures contracts for September settlement started on the Shanghai International Energy Exchange at 440.20 yuan ($69.70) per barrel. Some 18,540 lots have reportedly been sold and purchased so far. Concerns that the dollar’s glory days are over began last year.

The long-awaited step evoked a surge in global prices for oil with Brent Crude soaring to $71 a barrel for the first time since 2015. US crude benchmark West Texas Intermediate (WTI) reached the highest level in three years at $66.55 per barrel, before retreating to $65.53, reported RT

This could be bad news for the dollar.

Chinese authorities have reportedly accelerated the launch amid growing crude imports and just last year, the country outpaced the US as the world’s number one importer of oil. Thus, the contracts may not only help to win some control over pricing from the major international benchmarks but also promote the use of Chinese currency in global trade.

The greenback will get weaker, as soon as other nations have a real credible alternative to it, Ann Lee, Adjunct Professor of Economics and Finance at New York University and author of the book “What the US Can Learn From China,” told RT.  Lee also says this is a “game changer” for the US.  “It is more of a game changer for the US. As soon as other nations have a real credible alternative to the US dollar, they can dump dollars and switch to the yuan which can spark a dollar crisis. If that happens, not only will there be inflation from the tariffs, but also from the flood of dollars, said Lee.

Peter Schiff, a financial guru who predicted the 2008 recession, also said that the dollar will collapse. And when it does, things won’t look optimistic for those who use dollars. Although Schiff holds firm that the consequence of the Federal Reserve manipulating the economy will be the crash of the dollar, the Chinese petro-yuan could also play a role.

“They [the Fed] actually made the bubbles bigger than the ones that popped. So now, the dollar’s collapse is going to be that much bigger, because it’s now a bigger bubble with more air to come out of it. And I think they have no more tricks up their sleeves,” said Schiff. “When this happens – it’s over.”

 

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Author: Mac Slavo
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Date: March 26th, 2018
Website: www.SHTFplan.com

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35 Comments...

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  1. Concerned Citizen says:

    Well, it is finally about on our “sidewalks” folks…I suppose time Will Tell. The entire system is such a fake, manipulated mess.

    • Heartless says:

      CC, you’re right. This sawing back and forth, up and down of the markets always make me remember that when you saw a log, eventually you make it through to the bottom and it’s cut. But hey sports-fans!!! The market jumped almost 700 DJIA up as I write this!!! Guess it hasn’t taken this article’s news into account yet, huh?

  2. Marching off to Fredonia! It looks like war! Price of Chinese food is going up.

  3. I need to go into my backyard and start digging.

    If there is a financial collapse, I will need to live off the fruits of my land.

    I built a self sustaining property with many varieties of fruit trees as well as an almond tree and an olive tree when I was living in California. The property has an established apricot tree. The seed of the apricot contains B17 (Laetrile). Laetrile was used in the mid twentieth century as a treatment for Cancer.

    Regardless of what happens to the dollar, I will grow food. I ordered a shovel from Germany. It is really terrific. The edge is not razor sharp. You can put your fingers on it without being cut, but the edge is jagged like a knife. It goes through small roots. I’m looking forward to planting a few trees outback.

    The dirt isn’t so great here where I am now, but the ribs and such are outstanding.

    _

    • bb in GA says:

      The big diss by the enviros on Almonds is that the trees take an unusual amount of water to produce the nuts. Is this true ?

      Do you have to irrigate beyond the rainfall ?

      In N GA we get about 48 – 52 inches of rain per year, so unless we have drought conditions, most fruit and nut trees (I have a few apple and pecan trees) do alright without any extra.

      <bb

  4. norrak says:

    China is one of the biggest consumers of petroleum products in the world. That also makes them one of the biggest emitters of co2. The USA, China, and India are the countries that produce the most food. The important fact here is that China and India have the biggest populations in the world and use all their food production to feed their own. The USA can export their food products, and still feed their populace. We, USA, can withhold oil and food from China. Yes, they can import from other countries, so let them. See how that works out for them. The USA can stand alone, we don’t need China for anything. Don’t export anything to China. The USA also needs to refuse any kind of payments with any currency other than the dollar. Time to play hardball.

    • rellic says:

      Norrak,
      Well said!
      I made a comment very similar to yours but it went into the famous moderation.

    • rellik says:

      Norrak,
      Well said!
      I made a comment very similar to yours but it went into the famous moderation. Maybe because I mis-spelled my user name

      • It’s a WordPress thing, not a SHTFplan thing. WordPress approves some comments, and puts others in a queue for moderation. We have no control over that.

        • rellik says:

          Thanks Mac!
          I screwed up by using the wrong user name.

        • the blame-e says:

          “It’s a WordPress thing, not a SHTFplan thing.”

          Yeah, not your fault. That would be too easy. “I only work here.” Is that it, Mac?

          There were a lot more comments here. Where did they all go? Who do I go and see at WordPress (or whatever) about that? Maybe some 17-year-old Parkland student is in charge of things now. That makes about as much sense as the WordPress thing.

      • Heartless says:

        rellik – you may want to read about WordPress and just how it works. https://codex.wordpress.org/Comment_Moderation An example of how I’ve screwed up is by use of certain punctuation. Asterisks, exclamation marks…. all actually operands in the coding used to both define a possible comment as being sent to the dustbin and/or by spammers striving to mess things up. The link to ‘regular expressions’ is informative. I used to sort get ticked off until I realized what was going on.

    • PeterFrancisco says:

      China would get along just fine without the US. We don’t need China for anything? Go into any store. The majority of the product is made in China, and we can not make the stuff in this country because we allowed the manufacturing capacity to move offshore for good. Then there’s the separate animal of how much this stuff would cost if it were made in the US. It would cost so much that only a small handful of Americans would actually be able to afford to buy the stuff.

      Don’t export to China? Right now, China is absorbing what is excess US production because Americans don’t have the money in their wallets to throw on the table to do the job.

      As far as refusing currency other than dollars goes, right now, the US is paid in dollars for its exports. The trade settlement paper used in the transactions are Treasuries. The buyer of the goods buys Treasuries and uses them to pay the seller of the goods. Look at the balance sheets and offshore holdings of this country’s biggest exporters. They are teeming with Treasuries, because they park the Treasuries in offshore facilities after being paid in Treasuries for their exports.

      That is going to change, big time. The US will have two options. Take currencies other than dollars for its exports, or choke on them back home after other countries dump their Treasuries and bounce them back to the US. What happens in the latter case? Only buyer for the Treasuries is the Fed. Those goods for which payment was refused hyper-inflate on the store shelf or in the warehouse. Why? Because the people dumping the Treasuries back on the Fed will demand to be paid in something other than dollars. The US has virtually no gold. JPM is sitting on hundreds of millions of ounces of silver. Guess why? To settle bounced Treasuries on behalf of the Fed. Silver goes parabolic at that point and hyperinflation on said goods kicks into overdrive. If you don’t have silver of your own, at that point you are effectively priced out of the market for any kinds of goods at all. If you do have silver of your own, everything is going to be a fire sale because the price appreciation in silver is going to far outpace the inflation in the price tag of the goods.

      • h5mind says:

        Interesting point about silver, thanks! Hopefully we won’t have to dig our meals out of the trash, like the Venezuelans are doing now.

      • norrak says:

        I already don’t buy anything made in China. Chinese workmanship is poor. I’d rather pay for quality. I also will not buy food from Mexico. Did you ever hear of growing your own? If more people stepped up and refused Chinese and Mexican products the scenario would change. It’s the American people’s fault that their only choices on certain items are from foreign countries. I promote isolationism and believe the USA can stand alone if it wants to. The problem with this is our own government wants to promote foreign nations at the expense of our own country. We are still a strong nation and can become stronger buy going back to producing everything we need. If we continue down our present path, we will become a third world country controlled by the NWO. Prepare yourselves.

    • kovran says:

      imports from the United States of fresh fruit, dried fruit, grape wine, stainless steel and some other products, a total of 120 items. And without that, China will disappear ?

  5. Bill says:

    The MSM will not likely report about the Petro-yuan, it they do, it will spun into how good it is for America. For example, when Obama was president, the national employment was spun to show about 200 thousand jobs created each month, but they never said almost 90 % of those jobs were either part-time, or low-wage with no benefits. Then the gov’t created categories to redefine what unemployment meant. The MSM would report that gov’t showing the unemployment rate is 5 %, this is patently absurd, there are approximately 95 million Americans between 18 to 65 not working; yes many are retired, but the real unemployment rate is about 20 %. A country cannot have a thriving middle class with those kinds of jobs.
    They’ll say the new yuan is good for trade, or help bring stability to financial markets or some other crap. Just like they said NAFTA and WTO was good for America. Now we have gutted manufacturing, low wage-low skill jobs, and annual trillion dollar trade deficits. It’s obvious no one has acted on behalf of the people. Instead, all the deals the US has entered into has only channeled almost 90 % new wealth into top the 1 %., how’s that working for the people?

  6. Anonymous says:

    china would have to have a currency backed by gold to threaten the USA dollar. That WONT happen as the yuan would be too expensive & harm chinese exports.
    THE DOLLAR WILL STILL BE KING FOR YEARS TO COME

    • kovran says:

      To have a dollar for many years it is necessary to have a product .imports from the United States of fresh fruit, dried fruit, grape wine, stainless steel and some other products, a total of 120 items. And without that, China will disappear ?

    • Old Guy says:

      Chinas Yuan is backed by gold. they have two gold exchanges where you can trade Yuan for Gold. That sorry Kissiner masterminded the going off the gold standard and creating the Opec Cartel and the Petro Dollar. The big spending bill that trump just signed. Trump doesn’t have to do what it says. Those are suggestions & recomendations from congress. Trump can not spend or spend it as he sees fit. and He probably will use some of it to build the wall. He certainly will not give the UN the amount congress has budgeted. The only authority who can question his actions is the congressional oversite committee. and as long as he don’t steal it or give it to undeserving folks they cant do anything. The war powers act gives the President a lot of additude.

    • 2018 Is Now says:

      Don’t live in the illusionary world my friend.

  7. It's Over says:

    This is a very sad day. I don’t think many people realize quite what we are up against.

    From what I’ve been able to research, only 350 million or so Chinese are ‘doing well’ and partaking of China’s new found prosperity.

    The rest of the 1.2 billion Chinese are still living like it’s in the early 1900’s.

    They are waiting for their turn to join the 350 million and begin purchasing modern goods and services.

    China’s economy will grow strongly for decades. Over the next 20-30 years, it will produce 40 – 50+ trillion dollars equivalent in GDP a year. Maybe a lot higher.

    Just imagine how strong they could make their military with that kind of GDP. They may end up spending trillions of dollars a year on defense in the future. No one will be able to match them. Taiwan will be ‘reunited’ with China one way or another.

    The petro-yuan’s market share growth will take time (years), however they have time. They plan for the future. Sadly, the U.S. does not.

  8. DMONIC says:

    Not in our lifetimes this will happen. Stop it already.

  9. rellic says:

    The real question we need to ask is, can you trust the Chinese?
    Generally the world will say no.
    There are no currencies based on gold that I know of, and there certainty is not enough gold in the entire world to back the Yuan.
    They can’t back the Yuan with food or energy production, America can back the Dollar with both food and energy production as we make enough that we can export them.
    Money is not wealth, it is a means to move wealth(resources) from one place to another.
    The dollar will be around for a while.

    • PeterFrancisco says:

      When you have physical ownership of physical gold, you dictate what the price will be. Right now, based on the number of different people I follow on this, I would conclude with a very high degree of certainty that China and Russia have, at an absolute bare minimum, 45,000 tons each of above ground physical gold that they could roll out on flatbeds any time they wanted to. And this is not even the bullion these countries will use to back their currencies. This bullion is staying in their national reserves in perpetuity.

      When you talk about backing the dollar with agricultural and energy production, do you really know what that is? Who would choose a currency backed by soybeans and corn over a currency backed by gold? Only a complete moron. Such a currency would be complete garbage to anyone who doesn’t have an immediate use or outlet for the agricultural products they obtain upon conversion. As for energy production, all I can say is go to Reluctant Preppers You Tube and look up a recent 56 minute video with Rob Kirby, who exposes US oil production for the mirage that it is. The only reason the US is an exporter of oil is because it imports Canadian shale oil at a $30 discount to WTI, which then allows the US to become a low margin exporter of its own oil. If the Canadians get rid of the buffoon running their country, this absurd form of arbitrage comes to an end, and so would any energy production backing to the dollar.

      True, money is not wealth. It is the means to move wealth from point A to point B. It is also the means to acquire the measures of wealth. We are about to enter a world where those measures of wealth, such as real estate, automobiles, transports, and the like will only be able to be acquired with true stores of wealth, namely gold and silver, or currency backed by them. No one is going to accept soybeans, or something backed by soybeans, in return for this stuff.

  10. Kevin2 says:

    Globalism rightly or wrongly has facilitated interdependence. If China cuts out the US with a competing currency dropping its value the US Treasures they own drop in value.

  11. justtom says:

    So the great collapse ? Followed by wrol and shtf in the streets. I ain’t getting any younger you know, so just get on with it already.

  12. Old Guy says:

    This is actually a good thing. The policy of waging wars over in the oil producing countries to force the monopoly of the digital fiat created from nothing petro dollars will soon stop bearing fruit. The fed will no longer have any world wide clout. Maybe the USA will be forced to mind its own business? Those troops over on forieghn soil. They are not protecting the USA freedoms or bill of rights. They are doing the bidding of the NWO and Agenda 21 folks. The same with the new push for more gun laws. Those are in place to disarm the USA citizens.

  13. Collapse? Sure…but when?

    Where’s that Porter Stansberry guy? He got me to buy some damned expensive silver precious back in 2010-2011.

    Convinced me the sky was falling. Bet he retired a rich man.

  14. Anonymous says:

    Lets also not forget here that Ivanka Trumps entire line of (plagiarized/copied) women’s clothing, purses and shoes are MADE IN CHINA. The Trumps are two-faced, double-standard hypocrites.

  15. Hope Xi will do whatever it takes to demolish yankystan economy. This is a good start to show he means business this time. Even if they cut off their noses despite their faces it will be so worth it to watch the chosen ones implode. . Hope Xi pounds trump and completely destroy usa economy. Xi and his men may suffer for a short time, but they do have the capacity to inflict so much pain on yanky that they may not recover ever. That is the strategy Xi needs to take TODAY. Completely isolate yanky. Stop the treasury purchases TODAY. Do what ever is required to finally bankrupt them. If that don’t work then at least Xi has other ways to make it so sam can NEVER ever recover again. Maybe Xi can get yanky to attack them. What ever it takes at least now it might finally get going. China should do the FF then flatten yanky in reply……………..

  16. canuck says says:

    Folks you got to wake up. China has fields in Africa and south America. They export food. Haven’t you looked at where some of your food comes from? Our supermarkets have more garlic from China than local. A lot of fish and snow peas. Some fruits also. Most people think the bible is just religion. Your dead wrong. Check out the history of Israel. The ancient buildings. The dead sea scrolls. What it says that money is going to be the currency. You may use it as we do now in certain communities amongst yourselves. .David Wilkerson saw fires in the cities in a vision. The way things are going we have less than 10 years before war and plagues. If your not keeping the Sabbath and eating pork your history. The christian think they can eat pork. Not what Isaiah says. .66:4?. Righteousness before any prepping. The apostles kept the feast days and observed all the old testament holidays. We are to keep them. ..not Easter and Christmas.

  17. Old Guy says:

    Well its already started. This is the beginning of the end of the FED.

  18. message in a bottle says:

    The dollars death has been imminent since 1913. Here’s a newsflash.
    WE WILL NOT BE THE RESERVE CURRENCY OF THE WORLD, FOREVER.

  19. cranerigger says:

    We use to refer to the U.S. dollar as the “world reserve currency” meaning that transactions for oil and other commodities were primarily accomplished in U.S. dollars. This provided a huge advantage to Americans as we benefitted from our own trade as well as foreign transactions. It also enabled the Federal Reserve to print imaginary dollars into oblivion. Thank you Ben Bernake for “Quantitative Easing”. When we lose this advantage to the “petro yuan”, our approximate 200 trillion dollar debt in unfunded liabilities will crush our standard of living.