April 28, 2024

Importance of oil

– Oil dwarfs all other commodities with a $1.72 trillion market size
– The entire metals market (iron, copper, aluminum, zinc, etc) is $660 billion
– Gold is $170 billion and silver is $20 billion

History of petrodollar

– Bretton Woods international monetary system established in 1944
– US Dollar became world reserve currency backed by 20,000 tonnes of gold
– Dollar pegged to gold at $35/oz
– Inflation (esp in late 1960’s) caused the value of dollar to decline and value of gold to rise
– Foreigners depleted US gold reserves to 8,100 tonnes to buy the cheap gold
– Nixon lifted gold backing from dollar in 1971 to stop the gold hemorrhage
– Agreements made with Saudi Arabia to create petrodollar in exchange for House of Saud regime support in 1971 and 1973
– OPEC oil is quoted and traded in US dollars. OPEC controls 81% of world reserves.
– Instead of dollar backed by gold, the dollar is backed by oil. All major oil purchases by any country must use dollars.
– If dollar is no longer backed by oil, dollar will lose reserve currency status and lose value

Rise of petroyuan

– In 2017, China became world’s largest importer of oil
– Petroyuan launch on March 26, 2018
– Petroyuan will be convertable to gold
– Petroyuan will be embraced by countries hit/threatened with sanctions – Russia, Libya, Iran, Iraq, Venezuela

Links

China sees new world order with oil benchmark backed by gold
Timing the Collapse: Ron Paul Says Watch the Petrodollar
Petrodollar: System, History, How It Recycles, Will It Collapse?
Here’s How We Got Here: A Short Primer On The History Of The Petrodollar
The Oil Market is Bigger Than All Metal Markets Combined
An Excellent Explanation of the Petrodollar System
The Rise And Fall Of The Petrodollar System
The Great Inflation
The inflation nightmare that terrifies central bankers actually happened in the late-1960s
History of Oil
China Takes Crude Crown as Output Lags Behind Rising Demand
The Rise Of The Petroyuan
China’s long-heralded crude oil futures contract to start trading March 26
Petro-Yuan Rising: The Must-Read Truth Behind China’s Plan to Dethrone the Dollar
China plans to break petrodollar stranglehold
American Energy Dominance And The Rise of The Petro-Yuan
PetroYuan Futures Open – Over 10 BillIon Notional Trades In First Hour
Shanghai International Energy Exchange