Courtesy of Mish.
Is the end of US dollar hegemony at hand?
Inquiring minds may be asking that question given China’s Zhou Says Some Countries Using Yuan in Reserves.
Some countries are already using the Chinese yuan in their foreign-currency reserves without announcing it publicly, central bank governor Zhou Xiaochuan said.
While China’s yuan has begun to be used as a reserve currency for several years, some countries “may not be willing to say so,” Zhou told Bloomberg on the sidelines of the International Monetary Fund meetings in Washington.
China has stepped up efforts to promote the yuan’s use overseas since the global financial crisis, as expansion in the world’s second-largest economy provides more clout while Europe has yet to fully recover. The European Central Bank will discuss next week whether to begin laying the groundwork to add the Chinese yuan to its foreign-currency reserves, Bloomberg reported yesterday.
Over the course of the past decade there has been countless articles on the end of US dollar supremacy, the crash of the dollar, and the rise of the Yuan and Ruble.
Recent Examples
- Libertarian News, August 27, 2014: Petrodollar Tyranny Coming To An End As Russia-China Trade Oil Without Dollars.
- Zerohedge, August 27, 2014: Nail In The Petrodollar Coffin: Gazprom Begins Accepting Payment For Oil In Ruble, Yuan
- Kitco, August 26, 2014: Will the US Succeed in Breaking Russia to Maintain Dollar Hegemony?
- Zerohedge, August 5, 2014: The Rise of the Petroyuan and the Slow Erosion of Dollar Hegemony
- The Telegraph, July 19, 2014: The dollar’s 70-year dominance is coming to an end
- Global Research, April 08, 2014: Russia’s Petro-Ruble Challenges US Dollar Hegemony. China Seeks Development of Eurasian Trade. “Russia has just dropped another bombshell, announcing not only the de-coupling of its trade from the dollar, but also that its hydrocarbon trade will in the future be carried out in rubles and local currencies of its trading partners – no longer in dollars.”
- Gold Silver World, January 7, 2014: Signs of A Cracking Dollar Hegemony
- Zerohedge, November 21, 2013: China Fires Shot Across Petrodollar Bow: Shanghai Futures Exchange May Price Crude Oil Futures In Yuan
- Financial Post, October 4, 2012: China mounts challenge to dollar’s hegemony
Prime Petrodollar Nonsense
The most ludicrous of the above articles is by Clive Maund on Kitco. It’s a perfect example of misguided, overblown, petrodollar hype.
The central thesis of these articles is
- It takes dollars to buy oil
- Oil is starting to trade in yuan and rubles
- Oil will start trading in other currencies
- Collapse of the dollar is at hand
- Yuan will soon supplant the Dollar as world’s reserve currency
The starting thesis that it takes dollars to buy oil is wrong.
As I have pointed out for at least a decade, it does not take dollars to buy oil any more than it takes dollars to buy gold….
