China Moves on New World Order: Will Buy Oil With Gold-Backed Currency—Bypassing US Petrodollar

In a direct challenge to U.S. imperialism, China’s yuan-denominated contracts – backed by gold -will let oil exporting countries bypass using the U.S. petrodollar.

Typically, crude oil is priced in relation to Brent or West Texas Intermediate futures, both denominated in U.S. dollars.

The move by the Chinese will allow oil exporting countries such as Iran and Russia to bypass U.S. sanctions by trading in yuan instead of U.S. dollars. The move is a direct result of the U.S. proclivity to use the dollar as a weapon against countries that refuse to bend to the imperial will of the United States. To make the yuan denominated contracts more appealing, China intends to make the yuan fully convertible to gold on the Shanghai and Hong Kong exchanges.

“The rules of the global oil game may begin to change enormously,” said Luke Gromen, founder of U.S.-based macroeconomic research company FFTT.

According to a report by OilPrice.com:

Last month, the Shanghai Futures Exchange and its subsidiary Shanghai International Energy Exchange, INE, successfully completed four tests in production environment for the crude oil futures, and the exchange continues with preparatory works for the listing of crude oil futures, aiming for the launch by the end of this year.

Yuan-backed oil and gold futures mean that users can be paid in physical gold, said Alasdair Macleod, head of research at Goldmoney, a gold-based financial services company based in Toronto.

While some potential foreign traders have expressed reservations that the contract would be priced in yuan, according to analysts who spoke to Nikkei Asian Review, backing the yuan-priced futures with gold would be appealing to oil exporters — especially to those that would rather avoid U.S. dollars in trade.

“It is a mechanism which is likely to appeal to oil producers that prefer to avoid using dollars, and are not ready to accept that being paid in yuan for oil sales to China is a good idea either,” Macleod said.

These recent moves by the Chinese are part of a larger de-dollarization strategy by other world powers intent on creating a more multipolar global framework.

As we reported in July, the formation of a BRICS gold marketplace, which could bypass the U.S. Petrodollar in bilateral trade, continues to take shape as Russia’s largest bank, state-owned Sberbank, announced that its Swiss subsidiary had begun trading in gold on the Shanghai Gold Exchange.

Russian officials have repeatedly signaled that they plan to conduct transactions with China using gold as a means of marginalizing the power of the dollar in bilateral trade between the geopolitically powerful nations. This latest movement is quite simply the manifestation of a larger geopolitical game afoot between great powers.

report by the Centre for Research on Globalization clarifies the implications of these most recent moves by the Russians and the Chinese in an ongoing drive to replace the US petrodollar as the global reserve currency:

Fast forward to March 2017; the Russian Central Bank opened its first overseas office in Beijing as an early step in phasing in a gold-backed standard of trade. This would be done by finalizing the issuance of the first federal loan bonds denominated in Chinese yuan and to allow gold imports from Russia.

The Chinese government wishes to internationalize the yuan, and conduct trade in yuan as it has been doing, and is beginning to increase trade with Russia. They’ve been taking these steps with bilateral trading, native trading systems and so on. However, when Russia and China agreed on their bilateral US$400 billion pipeline deal, China wished to, and did, pay for the pipeline with yuan treasury bonds, and then later for Russian oil in yuan.

This evasion of, and unprecedented breakaway from, the reign of the US dollar monetary system is taking many forms, but one of the most threatening is the Russians trading Chinese yuan for gold. The Russians are already taking Chinese yuan, made from the sales of their oil to China, back to the Shanghai Gold Exchange to then buy gold with yuan-denominated gold futures contracts – basically a barter system or trade.

The Chinese are hoping that by starting to assimilate the yuan futures contract for oil, facilitating the payment of oil in yuan, the hedging of which will be done in Shanghai, it will allow the yuan to be perceived as a primary currency for trading oil. The world’s top importer (China) and exporter (Russia) are taking steps to convert payments into gold. This is known. So, who would be the greatest asset to lure into trading oil for yuan? The Saudis, of course.

All the Chinese need is for the Saudis to sell China oil in exchange for yuan. If the House of Saud decides to pursue that exchange, the Gulf petro-monarchies will follow suit, and then Nigeria, and so on. This will fundamentally threaten the petrodollar.

“In 2014 Russia and China signed two mammoth 30-year contracts for Russian gas to China. The contracts specified that the exchange would be done in Renminbi [yuan] and Russian rubles, not in dollars. That was the beginning of an accelerating process of de-dollarization that is underway today,”according to strategic risk consultant F. William Engdahl.

Russia and China are now creating a new paradigm for the world economy and paving the way for a global de-dollarization.

“A Russian-Chinese alternative to the dollar in the form of a gold-backed ruble and gold-backed Renminbi or yuan, could start a snowball exit from the US dollar, and with it, a severe decline in America’s ability to use the reserve dollar role to finance her wars with other peoples’ money,”Engdahl concludes.

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The upside of this is that the U.S. is now 2nd in the world in oil production.

So, let the Chinese buy our oil, pay us in gold.

What's wrong with that scenario. The gold is worth more, and we win.

https://www.eia.gov/todayinenergy/detail.php?id=26352

The truth of the economic matter is the following:

China KNOWS they need the U.S.A. MORE than America needs them. If America no longer buys Chinese (crap) products, their precarious economy would simply collapse. Would they, as a nation that has finally achieve world economic success, dare to throw America under the bus? Would they just kill their golden goose. It's very doubtful.

That was my thinking.........glad somebody agrees with me  ;o)

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LIGHTER SIDE

The cartoonist's homepage, indystar.com/opinion/varvel

ALERT ALERT

Schumer Refusing To Help Border Kids
Wants To Hurt Trump Instead

The controversy over how underage illegal aliens are handled at the border is heating up — but Democrat Senator Chuck Schumer just rejected a good-faith proposal to fix the problem.

A growing number of people on both sides of the political aisle have expressed concern for border separations, which occur when migrants are caught breaking the law along the border while they have children with them, or when the often exploitative relationship between adults and minors at the border cannot be established.

A vast amount of mis-information and outright lying about the situation has muddied the water, making it tough to understand the situation in its entirety.

Both liberals and conservatives, however, have voiced their support for a better system that results in fewer family separations, and even President Donald Trump has indicated that he is willing to stand with Congress if they change the law.

Shockingly, however, it looks like one of the most well-known faces of the Democratic party isn’t willing to take action, and is instead playing politics in order to attack Trump.

On Tuesday, Schumer openly rejected a Republican proposal to fix the immigrant separation problem at the legislative level, and instead whined about the president.

“There are so many obstacles to legislation and when the president can do it with his own pen, it makes no sense,” Schumer stated, according to The Hill.

“Legislation is not the way to go here when it’s so easy for the president to sign it,” he complained.

Democrats Reject Bill To Keep Families Together At Border – Schumer Says He “Wants To Keep Focus On Trump”

Think about that for a second: The president’s job is to execute existing laws. The legislature’s job is to change or enact new laws when needed.

A senator elected to the legislature for exactly that purpose is now refusing to do his job and pass legislation, while simultaneously blaming the president for enforcing the existing laws, as he is sworn to do.

If there was any doubt that Schumer and the Democrats are playing politics instead of trying to actually help migrant families, the senator made his intentions clear: Obstruct and point fingers at Trump.

“Asked if that meant Democrats would not support a bill backed by Senate Majority Leader Mitch McConnell (R-Ky.) to keep immigrant families together while seeking asylum on the U.S. border, Schumer said they want to keep the focus on Trump,” The Hill explained.

Make no mistake: The Democrats dragging their feet and refusing to back legislation already drafted by Republicans will prolong the problems at the border.

“Schumer’s opposition to a legislative fix means there likely won’t be a quick end to the emotional images of immigrant children being separated from their families unless Trump backs down,” The Hill reported.

“Democrats want to keep the pressure on Trump instead of having Congress assume responsibility for the growing crisis,” the news outlet continued.

Again: There’s a solution ready to go, with Republicans including Senate Majority Leader Mitch McConnell ready to support it. Yet Democrats like Schumer apparently believe that scoring political points against Trump is more important than helping broken families on the border, even as their own liberal voters demand action.

“Congress alone can fix it,” stated Homeland Security Secretary Kirstjen Nielsen on Monday.

“I support, and all of the senators of the Republican conference support, a plan that keeps families together,” McConnell agreed.

“We need to fix the problem and it requires a legislative solution,” he said.

Yet Democrats refuse to budge.

This “do nothing but blame Trump” response from the left should prove beyond a doubt that all the tears and hand-wringing from liberals are disingenuous. They’re for show. If it was truly about helping innocent kids at the border, Schumer and his fellow Democrats could act right now.

If their priority was actually to solve the problem and help broken families, scoring points against Trump shouldn’t even be a concern. Even if they believed he was being stubborn on the issue, they could take the high road by doing their jobs and supporting bipartisan legislation.

They don’t, because solving the problem was never their goal. They are playing political games and using devastated children as pawns, while pretending that the president is the monster.

That’s sick… and the American people need to see exactly who is doing the obstruction.

SLAVEHOLDER??

Washington Post Compares
Jeff Sessions To Slaveholder’

The Washington Post compared Attorney General Jeff Sessions to “slaveholders” after he quoted the Bible on Thursday while discussing his department’s policy of prosecuting all illegal immigrants who cross the border.

Sessions made the statement during a speech to law enforcement officers in Fort Wayne, Indiana.

WaPo ran a story entitled “Sessions cites Bible passage used to defend slavery in defense of separating immigrant families” by general assignment editor Keith McMillan and religion reporter Julie Zauzmer on Friday.

Rather than detailing the statistics Sessions cited in the speech that explain the immigration policy, the story quoted John Fea, a history professor at Messiah College in Pennsylvania.

“This is the same argument that Southern slaveholders and the advocates of a Southern way of life made,” Fea said.

Sessions spent much of the speech discussing the numbers behind current immigration policy, including separating families at the Southwest border.

“I would cite you to the Apostle Paul and his clear and wise command in Romans 13, to obey the laws of the government because God has ordained the government for his purposes,” Sessions said.

“Orderly and lawful processes are good in themselves. Consistent and fair application of the law is in itself a good and moral thing, and that protects the weak and protects the lawful.”

“The previous administration wouldn’t prosecute aliens if they came with children,” Sessions said.

“It was de-facto open borders if you came with children. The results were unsurprising. More and more illegal aliens started showing up at the border with children.”

Sessions laid out the numbers in the speech.

“In 2013, fewer than 15,000 family units were apprehended crossing our border illegally between ports of entry in dangerous areas of the country,” he said.

“Five years later, it was more than 75,000, a five-fold increase in five years. It didn’t even have to be their child that was brought, it could be anyone. You can imagine that this created a lot of danger.”

The U.S. has the “opportunity” to fix its broken immigration system now, Sessions said.

“I believe that’s it’s moral, right, just and decent that we have a lawful system of immigration,” he said. “The American people have been asking for it.”

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