Chinese oil futures could well jeopardize primacy of USD

Surkov

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China oil futures launch may threaten primacy of U.S. dollar

China’s launch on Monday of its crude futures exchange will improve the clout of the yuan in financial markets and could threaten the international primacy of the dollar, argues a new report by Hayden Briscoe, APAC head of fixed income at UBS Asset Management.

“This is the single biggest change in capital markets, maybe of all time,” Briscoe said...

This marked the culmination of a decade-long push by the Shanghai Futures Exchange (ShFE) to give the world’s largest energy consumer more power in pricing crude sold to Asia...

The renminbi’s prominence will only grow with China’s consumption: demand will increase 30.6 percent to 753 million tons per year in 2040, according to BP. This power will let China bypass the petro-dollar system...

As it stands, oil exporters store the revenue from their U.S. oil sales in Treasury bonds - a process known as “petro-dollar recycling.” As a result, the rise of the petro-yuan would also jeopardize a key source of financing for U.S. deficit spending...

So what say ye, is the primacy of the USD under threat?
 


Lumpy Talbot

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No
They'll have to be bombed, obviously. From here on all Chinese takeaway meals will be called Chicken Freedom Mein and Sweet n' Sour Freedom.

Etc etc.

Seriously though the Chinese have been preparing the Yuan-Reminimbi to go on the world's markets for quite some time.
 

Surkov

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They'll have to be bombed, obviously. From here on all Chinese takeaway meals will be called Chicken Freedom Mein and Sweet n' Sour Freedom.

Etc etc.

Seriously though the Chinese have been preparing the Yuan-Reminimbi to go on the world's markets for quite some time.
Is the primacy of the USD in jeopardy do you think?
 

Lumpy Talbot

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No
Is the primacy of the USD in jeopardy do you think?
Ultimately, yes. They've gone to enormous lengths in the past to protect the dollar as the 'petrodollar' and arguably have gone to war on two countries which have both suggested that the dollar should not be the currency in which oil has been traded.
 

Surkov

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Ultimately, yes. They've gone to enormous lengths in the past to protect the dollar as the 'petrodollar' and arguably have gone to war on two countries which have both suggested that the dollar should not be the currency in which oil has been traded.
One would hope going to war against China is not considered an option.

Chinese curse: may you live in interesting times.
 

NYCKY

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Is the primacy of the USD in jeopardy do you think?
Not immediately no. China doesn't have the legal framework or the free markets that the US has and the Yuan is not a credible reserve currency. Long term of course that will probably change but perhaps a more insidious threat is the ongoing political dysfunction in the US.
 

Surkov

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Not immediately no. China doesn't have the legal framework or the free markets that the US has and the Yuan is not a credible reserve currency. Long term of course that will probably change but perhaps a more insidious threat is the ongoing political dysfunction in the US.
Why so? Please keep it relevant to the thread topic. Thanks.
 

Lumpy Talbot

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No
One would hope going to war against China is not considered an option.

Chinese curse: may you live in interesting times.
Well basically it isn't an option unless those of us left want to be fighting world war 4 with sticks and stones at best.
 

Lumpy Talbot

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No
Not immediately no. China doesn't have the legal framework or the free markets that the US has and the Yuan is not a credible reserve currency. Long term of course that will probably change but perhaps a more insidious threat is the ongoing political dysfunction in the US.
The Chinese Remnimbi became an official reserve currency as declared by the International Monetary Fund in October 2016.
 

NYCKY

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The Chinese Remnimbi became an official reserve currency as declared by the International Monetary Fund in October 2016.
Yes thats why I used the word credible. About 1% of reserves(maybe it's gone up a bit lately) are held in the currency. I will reiterate that long term I expect this will change.
 

Lumpy Talbot

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No
Yes thats why I used the word credible. About 1% of reserves(maybe it's gone up a bit lately) are held in the currency. I will reiterate that long term I expect this will change.
Oh I can assure you that it will. The Chinese lads don't do anything in a strategic hurry. They have however been making preparations for a long time.
 

Surkov

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Yes thats why I used the word credible. About 1% of reserves(maybe it's gone up a bit lately) are held in the currency. I will reiterate that long term I expect this will change.
What do you expect to happen within the next ten years?
 

gerhard dengler

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China oil futures launch may threaten primacy of U.S. dollar

China’s launch on Monday of its crude futures exchange will improve the clout of the yuan in financial markets and could threaten the international primacy of the dollar, argues a new report by Hayden Briscoe, APAC head of fixed income at UBS Asset Management.

“This is the single biggest change in capital markets, maybe of all time,” Briscoe said...

This marked the culmination of a decade-long push by the Shanghai Futures Exchange (ShFE) to give the world’s largest energy consumer more power in pricing crude sold to Asia...

The renminbi’s prominence will only grow with China’s consumption: demand will increase 30.6 percent to 753 million tons per year in 2040, according to BP. This power will let China bypass the petro-dollar system...

As it stands, oil exporters store the revenue from their U.S. oil sales in Treasury bonds - a process known as “petro-dollar recycling.” As a result, the rise of the petro-yuan would also jeopardize a key source of financing for U.S. deficit spending...

So what say ye, is the primacy of the USD under threat?
The petrodollar has helped inoculate USA from the worst effects of the vagaries of international trade differentials for decades.

It could be argued that the petrodollar is a vital component in maintaining Americas economic superpower hegemony.

If that hegemony comes under threat by being overtaken or replaced ........
 

NYCKY

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Why so? Please keep it relevant to the thread topic. Thanks.
It's a combination of things, the polarization, the increasing Government shutdowns, exploding budget deficits, possible ratings downgrades, the possibility of a default. What's helping the US here is that there really isn't a strong enough alternative yet.
 

Boy M5

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China oil futures launch may threaten primacy of U.S. dollar

China’s launch on Monday of its crude futures exchange will improve the clout of the yuan in financial markets and could threaten the international primacy of the dollar, argues a new report by Hayden Briscoe, APAC head of fixed income at UBS Asset Management.

“This is the single biggest change in capital markets, maybe of all time,” Briscoe said...

This marked the culmination of a decade-long push by the Shanghai Futures Exchange (ShFE) to give the world’s largest energy consumer more power in pricing crude sold to Asia...

The renminbi’s prominence will only grow with China’s consumption: demand will increase 30.6 percent to 753 million tons per year in 2040, according to BP. This power will let China bypass the petro-dollar system...

As it stands, oil exporters store the revenue from their U.S. oil sales in Treasury bonds - a process known as “petro-dollar recycling.” As a result, the rise of the petro-yuan would also jeopardize a key source of financing for U.S. deficit spending...

So what say ye, is the primacy of the USD under threat?
Just as well the US has got such a far sighted, competent, economically aware leader.
 

Boy M5

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The petrodollar has helped inoculate USA from the worst effects of the vagaries of international trade differentials for decades.

It could be argued that the petrodollar is a vital component in maintaining Americas economic superpower hegemony.

If that hegemony comes under threat by being overtaken or replaced ........
First trade on the futures exchange was completed by Glencore. Pretty sure Vitol wasn't too far behind.
These are THE global traders.
They understand what is happening - very well.
 

Surkov

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Iran
Since the beginning of 2003, Iran has required payment in euros for exports to Asia and Europe. The government opened an Iranian Oil Bourse on the free trade zone on the island of Kish, for the express purpose of trading oil priced in other currencies, including euros.

Link

Will we see the rise of a petro-euro in response to the rise of the petro-yuan?
 

gerhard dengler

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First trade on the futures exchange was completed by Glencore. Pretty sure Vitol wasn't too far behind.
These are THE global traders.
They understand what is happening - very well.
Iran
Since the beginning of 2003, Iran has required payment in euros for exports to Asia and Europe. The government opened an Iranian Oil Bourse on the free trade zone on the island of Kish, for the express purpose of trading oil priced in other currencies, including euros.

Link

Will we see the rise of a petro-euro in response to the rise of the petro-yuan?
I don't see why not.

The world appears to be moving from unipolar economic one to a multipolar economic one.
 

Volatire

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First trade on the futures exchange was completed by Glencore. Pretty sure Vitol wasn't too far behind.
These are THE global traders.
They understand what is happening - very well.
Spoofing idiot
 


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