There’s a Way for Russia to Break the Petrodollar. Now’s the Time to Do It

Greetings,

There’s a Way for Russia to Break the Petrodollar. Now’s the Time to Do It

Organize a cartel of oil producers
Denominate sales in rubles, yuan
Dollar is no longer a good store of value
With more gold backing ruble, yuan can be

A profound transformation of the global monetary system is underway.

It is being driven by a perfect storm: the need for Russia and Iran to escape Western sanctions, the low interest rate policy of the U.S. Federal Reserve to keep the American economy afloat and the increasing demand for Middle East oil by China.

ESCAPING SANCTIONS

As economic sanctions are increasingly part of the West’s arsenal, those non-Western countries that are the target — or potential target — of such sanctions are devising a counterpunch: non-dollar trading.

It would, in effect, nullify the impact of sanctions.

Whether in yuan or roubles, non-dollar trading — which enables countries to bypass U.S. claims to legal jurisdiction — will transform the prospects facing Iran and Syria, particularly in the field of energy reserves, and deeply affect Iraq which is situated between the two.

President Putin has said (in the context of reducing Russia’s economic vulnerabilities) that he views the dollar monopoly in energy trade as damaging to the Russian economy.

Since hydrocarbon revenues form the most substantive part of Russia’s revenues, Putin’s desire to take action in this area is not surprising.

In the face of sanctions, Putin is seeking to reduce its economic dependence on the West.

Russia has signed two “holy grail” gas contracts with China and is in negotiations to offer the latter sophisticated weaponry.

It is also in the process of finalizing significant trade deals with India and Iran.

All of this will be to the benefit of Iran, too: the Russians recently announced a deal to build several new nuclear power plants there….more here

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There’s a Way for Russia to Break the Petrodollar. Now’s the Time to Do It