I first started reporting the gradual decline of the USD as world settlement currency back in ... 2003? At the time, it was suggested as a slow decline, but inexorable, and US foreign policy has made it certain.
Now comes news that:
Two years ago, in hushed tones at first, then ever louder, the financial world began discussing that which shall never be discussed in polite company - the end of the system that according to many has framed and facilitated the US Dollar's reserve currency status: the Petrodollar, ...
Readers of FC got the tip-off in 2003, so a full 10 years ahead of the financial world, it seems. And so it comes:
Sure enough, Gazprom has confirmed that since the beginning of the year, all oil sales to China have been settled in renminbi. From FT:
Russia's third-largest oil producer, is now settling all of its crude sales to China in renminbi, in the most clear sign yet that western sanctions have driven an increase in the use of the Chinese currency by Russian companies.
Pricing an entire oil flow in a non-dollar currency is a hugely tangible signal. Now the bit is between their teeth, and the USG jockey is not ceasing to use the foreign policy whip, this will keep going. Expect there to be a general re-alignment of global financial systems on the back of this shift.
Posted by iang at June 9, 2015 06:13 PM