Posted on 04/05/2014 6:51:12 AM PDT by Rusty0604
On the heels of Russia's potential "holy grail" gas deal with China, the news of a Russia-Iran oil "barter" deal, it appears the US is starting to get very concerned about its almighty Petrodollar
•*U.S. HAS WARNED RUSSIA, IRAN AGAINST POSSIBLE OIL BARTER DEAL •*U.S. SAYS ANY SUCH DEAL WOULD TRIGGER SANCTIONS •*U.S. HAS CONVEYED CONCERNS TO IRANIAN GOVT THROUGH ALL CHANNELS We suspect these sanctions would have more teeth than some travel bans, but, as we noted previously, it is just as likely to be another epic geopolitical debacle resulting from what was originally intended to be a demonstration of strength and instead is rapidly turning out into a terminal confirmation of weakness.
As we explained earlier in the week,
Russia seems perfectly happy to telegraph that it is just as willing to use barter (and "heaven forbid" gold) and shortly other "regional" currencies, as it is to use the US Dollar, hardly the intended outcome of the western blocakde, which appears to have just backfired and further impacted the untouchable status of the Petrodollar.
...
"If Washington can't stop this deal, it could serve as a signal to other countries that the United States won't risk major diplomatic disputes at the expense of the sanctions regime,"
And here is Voice of Russia, "Russia prepares to attack the Petrodollar":
The US dollar's position as the base currency for global energy trading gives the US a number of unfair advantages. It seems that Moscow is ready to take those advantages away.
The existence of “petrodollars” is one of the pillars of America's economic might because it creates a significant external demand for American currency, allowing the US to accumulate enormous debts without defaulting. If a Japanese buyer want to buy a barrel of Saudi oil, he has to pay in dollars even if no American oil company ever touches the said barrel. Dollar has held a dominant position in global trading for such a long time that even Gazprom's natural gas contracts for Europe are priced and paid for in US dollars. Until recently, a significant part of EU-China trade had been priced in dollars.
Lately, China has led the BRICS efforts to dislodge the dollar from its position as the main global currency, but the “sanctions war” between Washington and Moscow gave an impetus to the long-awaited scheme to launch the petroruble and switch all Russian energy exports away from the US currency .
The main supporters of this plan are Sergey Glaziev, the economic aide of the Russian President and Igor Sechin, the CEO of Rosneft, the biggest Russian oil company and a close ally of Vladimir Putin. Both have been very vocal in their quest to replace the dollar with the Russian ruble. Now, several top Russian officials are pushing the plan forward.
First, it was the Minister of Economy, Alexei Ulyukaev who told Russia 24 news channel that the Russian energy companies must should ditch the dollar. “ They must be braver in signing contracts in rubles and the currencies of partner-countries, ” he said.
Then, on March 2, Andrei Kostin, the CEO of state-owned VTB bank, told the press that Gazprom, Rosneft and Rosoboronexport, state company specialized in weapon exports, can start trading in rubles. “ I've spoken to Gazprom, to Rosneft and Rosoboronexport management and they don't mind switching their exports to rubles. They only need a mechanism to do that ”, Kostin told the attendees of the annual Russian Bank Association meeting.
Judging by the statement made at the same meeting by Valentina Matviyenko, the speaker of Russia's upper house of parliament, it is safe to assume that no resources will be spared to create such a mechanism. “ Some ‘hot headed' decision-makers have already forgotten that the global economic crisis of 2008 - which is still taking its toll on the world - started with a collapse of certain credit institutions in the US, Great Britain and other countries. This is why we believe that any hostile financial actions are a double-edged sword and even the slightest error will send the boomerang back to the aborigines,” she said.
It seems that Moscow has decided who will be in charge of the “boomerang”. Igor Sechin, the CEO of Rosneft, has been nominated to chair the board of directors of Saint-Petersburg Commodity Exchange, a specialized commodity exchange. In October 2013, speaking at the World Energy Congress in Korea, Sechin called for a "global mechanism to trade natural gas" and went on suggesting that " it was advisable to create an international exchange for the participating countries, where transactions could be registered with the use of regional currencies ". Now, one of the most influential leaders of the global energy trading community has the perfect instrument to make this plan a reality. A Russian commodity exchange where reference prices for Russian oil and natural gas will be set in rubles instead of dollars will be a strong blow to the petrodollar.
Rosneft has recently signed a series of big contracts for oil exports to China and is close to signing a “jumbo deal” with Indian companies. In both deals, there are no US dollars involved. Reuters reports, that Russia is close to entering a goods-for-oil swap transaction with Iran that will give Rosneft around 500,000 barrels of Iranian oil per day to sell in the global market. The White House and the russophobes in the Senate are livid and are trying to block the transaction because it opens up some very serious and nasty scenarios for the petrodollar. If Sechin decides to sell this Iranian oil for rubles, through a Russian exchange, such move will boost the chances of the “petroruble” and will hurt the petrodollar.
It can be said that the US sanctions have opened a Pandora's box of troubles for the American currency. The Russian retaliation will surely be unpleasant for Washington, but what happens if other oil producers and consumers decide to follow the example set by Russia? During the last month, China opened two centers to process yuan-denominated trade flows, one in London and one in Frankfurt. Are the Chinese preparing a similar move against the greenback? We'll soon find out.
Finally, those curious what may happen next, only not to Iran but to Russia, are encouraged to read "From Petrodollar To Petrogold: The US Is Now Trying To Cut Off Iran's Access To Gold."
I am sure Odumbo has our back on this one. Yeah Right.
Its hard for the WH to get a piece of the deal when its barter. VJ must be annoyed her Tehran friends are cutting them out.
Don’t threaten with what you cannot back up with actions. And the world now knows this President has nothing to back himself up with, No morals, No core values that are worth defending at all costs.
So he presents himself as a toothless tiger and the world just humors him as he gums away on the things they’ll let him play with.
This Clown is giving all kinds of ideas for skits on SNL and other late night shows. As the Brits used to say, the only way anybody would follow this guy is out of sheer curiosity.
This is the sort of economic warfare that can quickly lead to actual warfare.
We are way, way out on a limb with the dollar. If it loses its status then we sink along with it.
The harm here is simple, as the demand for dollars drops, so does the value of the dollar in a free floating marketplace. As such, the price of imports rises which is directly felt on the inflation front. Want to see the budget deficits skyrocket further, watch when the interest rates also sky rocket to accommodate the declining dollar. The only “good” that will come from that is his royal eminence will be fully in the same league as Carter when he leaves office, hopefully on a rail.
Any individual or country that poses a credible risk of threatening the ‘World Reserve Currency’ status of the US Dollar had better make sure their life insurance premiums are paid up. That’s about the quickest way to get an Aircraft Carrier parked in the ocean nearest to their country. We can be sure the subject came up during 0-Tard’s latest travels abroad. Though he may despise our country in many ways, don’t think for a second that even 0bama doesn’t know where his real political/economic power comes from. With the debt we’re in and the deficits we run, if the oil producing countries abandoned the dollar for their transactions, we would be quickly brought to our knees. THAT’S the position our reckless leaders over the years have put us in.
I am sure Odumbo has our back on this one. Yeah Right.
He’s got the backs of gays, muslims, and blacks. Other than that, I don’t believe he cares much.
The man is the biggest dipsheet to ever happen to the United States.
Very true. The Chinese and others have been rumbling about the dollar for a few years now. The way the US has been printing money to finance social agendas causes loss of faith in the dollar.
MUST we discuss Obama's sex life on EVERY thread?
We need to move with all speed to gain energy independence and build the facilities needed to export LNG. The more we can export energy while retaining independence, the more we effectively end the threat from those who rely on energy exports for supporting their governments and agressions. That includes Russia, Iran and the Saudis.
We need to compete with Russia in Europe before the pipeline to China is completed.
“The man is the biggest dipsheet to ever happen to the United States.”
Right, and shame on all those who refused to listen to those who said he was ineligible to be president. I still strongly believe he should not have been inaugurated. Not only is he not a natural born citizen, he has no values steeped in US tradition. I’d like to see him “transformed” into a pillar of salt.
There is a conspiracy theory that a reason Obama doesn’t want US to become totally independent on oil is that if we didn’t have to purchase oil from other countries, it would reduce the amount of dollars circulating and would cause less foreign debt purchases and inflation.
I don’t think he is that smart.
Ah the famous mac daddy red line threat with many many many more to follow.
Putin rides a motorcycle in black leather pant and jacket
Mac daddy rides a tricycle in a pink bra, pink silk panties and pink lipstick
That will work - sure.
Very true. The Chinese and others have been rumbling about the dollar for a few years now. The way the US has been printing money to finance social agendas causes loss of faith in the dollar.
And who could blame them for wanting to get away from the dollar? Quantitative easing may fool a lot of the clowns that put Obama in office but it doesn’t fool people with common-sense.
Ah the famous mac daddy red line threat with many many many more to follow.
Putin rides a motorcycle in black leather pant and jacket
Mac daddy rides a tricycle in a pink bra, pink silk panties and pink lipstick
That will work - sure.
Not only is he not a natural born citizen, he has no values steeped in US tradition. I’d like to see him “transformed” into a pillar of salt.
I think more highly of salt. He’s just a big heaping pile of donkey dung.
I guess we shouldn’t expect someone raised in Indonesia by a transsexual nanny to have traditional American values. There is absolutely nothing normal about this evil bastard.
If the USA behaves aggressively in any way, let alone militarily attacks other countries because they don’t want to route their trade through a US controlled racket, almost the entire world will be united against us.
The anglo-media(US/UK) is badly misleading the America people about how much support our gov’t has in the “international community” and downplaying the massive resentment that most people in the world feel about decades of Fed Gov coercion, bullying and thuggery.
Most countries in the world would like to see the US taken down a notch and their governments only pretend to like our government because of all the coercion and bullying that happens behind the scenes.
We are not in a posistion to act the way our gov’t has been.
Debt does matter, despite what Paul Krugman or Dick Cheney want you to think.
We cannot possibly export enough LNG to weaken Russia.
Remember, using up our gas faster means we have less later when prices will likely be higher.
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