Foreign Policy

The petroyuan is rising to compete with the petrodollar.

"To forge such links, Washington effectively extorted its Gulf Arab allies, quietly conditioning U.S. guarantees of their security to their willingness to financially help the United States. Reneging on pledges to its European and Japanese partners, the Ford administration clandestinely pushed Saudi Arabia and other Gulf Arab producers to recycle substantial parts of their petrodollar surpluses into the U.S. economy through private (largely U.S.) intermediaries, rather than through the IMF. The Ford administration also elicited Gulf Arab support for Washington’s strained finances, reaching secret deals with Saudi Arabia and the United Arab Emirates for their central banks to buy large volumes of U.S. Treasury securities outside normal auction processes. These commitments helped Washington prevent the IMF from supplanting the United States as the main provider of international liquidity; they also gave a crucial early boost to Washington’s ambitions to finance U.S. deficits by recycling foreign dollar surpluses via private capital markets and purchases of U.S. government securities."

That explains 1970s high inflation and interest rates.

"The Saudis, especially, have vigorously defended exclusive pricing of oil in dollars. While Saudi Arabia and other major energy producers now accept payment for their oil exports in other major currencies, the larger share of the world’s hydrocarbon sales continue to be settled in dollars, perpetuating the greenback’s status as the world’s top transactional currency. Saudi Arabia and other Gulf Arab producers have supplemented their support for the oil-dollar nexus with ample purchases of advanced U.S. weapons; most have also pegged their currencies to the dollar – a commitment which senior Saudi officials describe as “strategic.” While the dollar’s share of global reserves has dropped, Gulf Arab petrodollar recycling helps keep it the world’s leading reserve currency. "

That explains why the US is such committed allies to those states.

"China is pursuing a protracted process of capital account liberalisation essential to full renminbi internationalisation, and is allowing more exchange rate flexibility for the yuan. The People’s Bank of China (PBOC) now has swap arrangements with over thirty other central banks – meaning that renminbi already effectively functions as a reserve currency."

That explains why the US is hostile to China.

"For several years, China has paid for some of its oil imports from Iran with renminbi; in 2012, the PBOC and the UAE Central Bank set up a $5.5 billion currency swap, setting the stage for settling Chinese oil imports from Abu Dhabi in renminbi – an important expansion of petroyuan use in the Persian Gulf. The $400 billion Sino-Russian gas deal that was concluded this year apparently provides for settling Chinese purchases of Russian gas inrenminbi; if fully realised, this would mean an appreciable role for renminbi in transnational gas transactions."

That explains why the US is hostile toward Russia.

US and EU aggression against Russia, and everywhere else, is hastening the dollar's decline.

Conflict in Ukraine and sanctions on Russia blamed for Italy's "surprising" economic slump.

Germany and China agree to clear payments with yuan.

China agrees with France and Luxembourg to clear payments with yuan.

UK and China agree to clear payments with yuan.

China to export yuan to BRICS.

The China-Russia axis of oil. 

Renminbi are denominated in yuan like federal reserve notes are denominated in dollars.

Obama slanders the Russian people for political gain. More.

Why is it surprising Obama invited dictators to summit?