Among the myriad of changes that have taken place since the start of the 21st century, perhaps one of the most significant is the fact that America has been cutting its own throat through its failed foreign policies in the Middle East. And with the U.S. completely and utterly reliant upon the dollar remaining as the singular reserve currency in the world, it is both confusing and insane to see Washington continuing to make the same mistakes over and over which are pushing energy nations to ditch the petrodollar in droves.
In recent years, Russia and China have been actively promoting the use of their own rubles and yuan in regional trade, while Iran last year forced a breakthrough by oil no longer in dollars but in euros .
It is Europe still imposing sanctions on Russia, otherwise Russia might have wanted to charge its natural gas in euros for a long time. Putin also knows that it is a very effective way to break the United States financial position, just as buying gold is a way of getting less dependent on the dollar.
This week came the second signal that indicates that the days of the dollar are counted as the world currency. Saudi Arabia announced this week after China’s top talks that they would like to unsubscribe from Chinese yuan . And the best way for Saudi Arabia to pay off these types of loans is to ask for oil for export to China.
This week, the US government announced the launch of new sanctions for Venezuela, with the aim of declining the country from dollars. Like Saudi Arabia, Venezuela is a major oil producer. These new sanctions can therefore encourage President Maduro to trade oil in euros or in yuan. Has the time of the petro-euro and the petro-yuan arrived? – Geo Trend Lines
Arrogance and hubris have been the downfall of many empires, and the U.S. is well down that same path as a Superpower since like their belief in the ‘new economy’ that emerged following the 2008 financial crisis, most analysts and politicians believe that somehow ‘it will be different this time’.
And unfortunately for them history, like nature, always wins out in the end.
Source: The Daily Economist