Earlier this year, Saudi Arabia said it was willing to discuss trade in currencies other than the US dollar. This could mark the beginning of the end of petrodollar exclusivity. That would be a huge blow to dollar dominance. Ron Paul said historians may one day call this the most significant event of 2023.
Every government policy has consequences – some intended and some unintended.
There is at least one serious unintended consequence of the economic sanctions levied against Russia after its invasion of Ukraine – an erosion of the US dollar dominance.
In a recent interview, Saudi Arabia Finance Minister Mohammed Al-Jadaan said the country is open to discussing trade in currencies other than the US dollar. This could mark the beginning of the end of petrodollar exclusivity. That would be a huge blow to dollar dominance.
Last week, I asked the question: is the US undermining the dollar’s credibility?
It appears the answer is — yes.
In another blow for dollar dominance, Saudi Arabia is reportedly considering pricing at least some of its Chinese oil sales in yuan.
Late last month, China finally launched its much anticipated yuan-denominated oil futures contract. Many analysts think this is yet another sign that the mighty dollar’s world dominance is coming to an end.
Turkey went on a gold-buying spree in 2017 and that trend continued in the first two months of 2018. Turkish President Recep Tayyip Erdoğan likes gold and it’s pretty clear the president has been pushing Turkey’s central bank to buy gold and reduce foreign currency reserves in an effort to move away from dependence on the dollar and euro.
On April 16, Erdoğan got a little more overt in his apparent quest to dethrone the dollar, suggesting international loans should be made in gold instead of greenbacks in order to prevent exchange rate pressure on economies.
China wants to dethrone the dollar and it could take a step in that direction before the end of the year.
According to numerous reports, China is prepared to launch a yuan-denominated oil futures contract before Christmas. Last week, the Shanghai International Energy Exchange successfully completed a fifth round of yuan-backed oil futures testing. According to a report by RT, the organization has met all the listing requirements and is set for an official launch.