Military sources in Iraq reported Wednesday that the Iranian Revolutionary Guards (IRGC) operational Al Qods arm had planted a command center and five bases in the Iraqi oil town of Kirkuk, after driving the Kurds out. An officer called Haji Ihsan was given this command. Continue reading
China continues to pursue its ambitious plan to make its currency—the yuan—more international.
The world’s top crude oil importer and key oil demand growth driver is now determined to get as many oil exporters as possible on board with accepting yuan payments for their oil.
China is now trying to persuade OPEC’s kingpin and biggest exporter, Saudi Arabia, to start accepting yuan for its crude oil. If the Chinese succeed, other oil exporters could follow suit and abandon the U.S. dollar as the world’s reserve currency. Pulling oil trade out of U.S. dollars would lead to decreased demand for U.S. securities across the board, Carl Weinberg, chief economist and managing director at High Frequency Economics, tells CNBC. Weinberg believes that the Chinese will “compel” the Saudis to accept to trade oil in yuan.
When the electricity stops in modern civilization, pretty much everything else stops. Not even gasoline-powered vehicles can get far before they are obliged to seek a fill-up—which they cannot get because gas pumps rely on electricity to operate.
When I wrote “The storms are only going to get worse” three weeks ago, I thought the world would have to wait quite a while for a storm more devastating than hurricanes Harvey and Irma. But instead, Hurricane Maria followed right after them and shut down electricity on the entire island of Puerto Rico except for those buildings with on-site generators. Continue reading
The geopolitical reality in the Middle East is changing dramatically.
The impact of the Arab Spring, the retraction of the U.S. military, and diminishing economic influence on the Arab world—as displayed during the Obama Administration—are facts.
The emergence of a Russian-Iranian-Turkish triangle is the new reality. The Western hegemony in the MENA region has ended, and not in a shy way, but with a long list of military conflicts and destabilization.
The first visit of a Saudi king to Russia shows the growing power of Russia in the Middle East. It also shows that not only Arab countries such as Saudi Arabia and the UAE, but also Egypt and Libya, are more likely to consider Moscow as a strategic ally.
Russia is poised to break out of its oil-related slump and become one of the best performing emerging markets economies in the years ahead. This sleeping giant is breaking its dependence on oil prices and embraces diversified growth.
When you hear the name “Russia” you probably run for cover. Russia has been the subject of nearly continuous media coverage bordering on frenzy since the election of Donald Trump last November. Continue reading
This particular cyber militia has been honing its skills and expanding since 2013. That’s when then-Iranian President Hassan Rouhani increased the country’s cybersecurity spending 12-fold, Business Insider reported in 2015. Rouhani allocated roughly $19.8 million to the Islamic Revolutionary Guard Corps (Tehran’s military) to up its cyber capabilities. Continue reading
Many Daily Reckoning readers are familiar with the original petrodollar deal the U.S made with Saudi Arabia.
It was set up by Henry Kissinger and Saudi princes in 1974 to prop up the U.S. dollar. At the time, confidence in the dollar was on shaky ground because President Nixon had ended gold convertibility of dollars in 1971.
Saudi Arabia was receiving dollars for their oil shipments, but they could no longer convert the dollars to gold at a guaranteed price directly with the U.S. Treasury. The Saudis were secretly dumping dollars and buying gold on the London market. This was putting pressure on the bullion banks receiving the dollar. Continue reading
Could this trend lead to the erosion of the dollar’s reserve-currency status?
On September 15, Venezuela began to publish prices for its oil in the Chinese yuan rather than in United States dollars, following President Nicolás Maduro’s promise earlier in the month to rid the South American country’s economy of the “tyranny of the dollar.” News emerged on September 13 that Venezuela was telling oil traders that it will stop receiving or sending payments in dollars.
The Venezuelan Oil Ministry published a statement about the decision to publish prices in yuan, saying, “This format is the result of the announcement made on September 7 by the president [Maduro] … that Venezuela will implement new strategies to free the country from the tyranny of the dollar.”
Whether in response to rising scorching tensions with the US, or simply to provide support for the ruble, on Tuesday Russian President Vladimir Putin instructed the government to approve legislation making the ruble the main currency of exchange at all Russian seaports by next year, RT reported citing the Kremlin website. Continue reading
The issue of when a global reserve currency begins or ends is not an exact science. There are no press releases announcing it, and neither are there big international conferences that end with the signing of treaties and a photo shoot. Nevertheless we can say with confidence that the reign of every world reserve currency has to come to and end at some point in time. During a changeover from one global currency to another, gold (and to a lesser extent silver) has always played a decisive role. Central banks and governments have long been aware that the dollar has a sell-by date as a reserve currency. But it has taken until now for the subject to be discussed openly. The fact that the issue has been on the radar of a powerful bank like JP Morgan for at least five years, should give one pause. Questions regarding the global reserve currency are not exactly discussed on CNBC every day. Most mainstream economists avoid the topic like the plague. The issue is too politically charged. However, that doesn’t make it any less important for investors to look for answers. On the contrary. The following questions need to be asked: What indications are there that the world is turning its back on the US dollar? And what are the clues that gold’s role could be strengthened in a new system? Continue reading
This is exactly what Global Geopolitics mentioned just a five days ago. The tables have turned on the global playing field and the traditional options once thought to be useful to use against China will now backfire. America will now have to get more creative to once again get ahead in controlling the narrative when it comes to using leverage against its adversaries.
Adding to this, China is likely waiting for such a move to happen, which will benefit the nation in numerous ways:
- China is a master in state propaganda, will successfully claim it’s the victim of a U.S. economic attack and rally support throughout the nation.
- China, through provocation, will have produced a reason to retaliate. The trade war begins.
- Retaliation will be successful due to the weakening of the U.S. positions and strengthening of Chinese leverage. World-wide, this will cause people and nations to question America’s ability to act and standing as the lone global superpower. If the Dollar goes down, the U.S. goes down with it.
Following Treasury Secretary Mnuchin’s threat that the US could impose economic sanctions on China if it does not implement the new sanctions regime against North Korea:“If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the US and international dollar system, and that’s quite meaningful.”
The countries ‘have provided capital, goods, services, and political backing’
Russia and China have played a major role in keeping the dictatorial Maduro regime in Venezuela afloat, according to expert testimony before the House Foreign Affairs Committee Wednesday.
Evan Ellis, a senior associate at the Center for Strategic and International Studies and a professor at the U.S. Army War College, appeared before the Western Hemisphere subcommittee of the Foreign Affairs Committee for a hearing on the malicious influence of state and criminal actors in the Latin American nation’s ongoing breakdown.
- President Maduro ‘ Venezuela will create a basket of currencies to free us from the dollar,”
- Oil traders ordered to stop accepting U.S. dollar in exchange for crude oil
- Order comes following calls from Russia and China to find alternatives to current reserve system
- U.S. Dollar accounts for two-thirds of global trade
- Venezuela has over ten-times more oil than United States
- Super powers are gradually turning to gold to avoid using world’s main reserve currency
- Are we seeing the beginning of the end for the U.S. dollar?
The oil-rich country of Venezuela has stopped accepting the U.S. Dollar as payment for oil.
Last week President Maduro warned that the country would this week ‘free’ itself from the US dollar. Continue reading
New financial instrument gives oil-exporting nations their long-sought alternative to the petrodollar.
China will soon introduce a crude oil futures contract denominated in yuan and convertible into gold, the Nikkei Asian Review reported on September 1. Analysts say that since China is the world’s largest oil importer, the move could deal a major blow to the global influence of the United States dollar.
The contract would allow oil exporting nations such as Russia, Iran and Venezuela to conduct sales in yuan, instead of in U.S. dollars, and to then change the yuan into gold on both the Hong Kong and Shanghai exchanges. This would also allow these countries that often fall afoul of American foreign policy to circumvent dollar-based U.S. sanctions.
The Chinese government has been developing the gold-backed futures contract for years, and Oilprice.com reports that it is expected to launch this year. It will be China’s first commodities futures contract available to foreign entities, and analysts expect many oil-exporting nations and firms to find it appealing. Continue reading