The Petroyuan Meme

At one point Wednesday, the most read stories on Bloomberg's public website were, in order, an article about Microsoft laying off engineers, Apple delaying augmented reality glasses and a short piece quoting Mohammed Al-Jadaan, Saudi Arabia's finance minister, who's in Davos this week. The Kingdom, Al-Jadaan told Bloomberg Television, has "no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro [or] whether it is the Saudi riyal."

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6 thoughts on “The Petroyuan Meme

  1. I mean shifts in US monetary policy, US interest rates and the US dollar have only worked for the US richest, and against not only the rest of the US but also the rest of the world. So it wasn’t really surprising when the RoW is showing signs of wanting to come together and have a say on those shifts. Can’t blame them. It’s surely a glacial process, but they’re at least trying to move in the same direction.

  2. “Shifts in US monetary policy, US interest rates and the US dollar have only worked for the US richest, and against not only the rest of the US but also the rest of the world.”

    Really? The Gulf hasn’t benefited from dollar pegs? The Saudis haven’t benefited from the petrodollar system? China hasn’t benefited from US-dollar based trade? The world hasn’t benefited from USD hegemony?

    You’re conflating the effects of post-GFC monetary policy with decades of dollar-based trade, commerce and global finance. Those are two different things.

    And the problem isn’t diversification, it’s the (tacit) flirting with autocratic governments by people pushing this fairy tale and, relatedly, the objectively crazy notion that the world would be a better place if the yuan supplanted the dollar.

    Do you want the fate of the global financial system, commodities trade and, ultimately, your own personal financial well-being to rest with the Politburo? I certainly hope not.

    Pozsar doesn’t want that either. It’s amusing how everyone pushing these narratives just happens to do so from the cozy confines of New York and London.

  3. Please don’t get me wrong. I want my personal financial well-being to rest with the US. And I really meant it because I’m neither a US citizen, nor writing these words from the cozy confines of London. I’m pretty close to China, actually. All I’m saying is that the RoW, along with rest of US, wasn’t amused with what’s transpired in the post-GFC era when it comes to the contribution of US monetary policy to spiraling inequality. And as far as I can tell, you weren’t amused either.

  4. Ultimately dominance of the dollar is backed by the power of the United States military, until nations have the power to topple the current world order. The dollar remains king.

    1. I wonder if the power of the US dollar has a lot to do with the freedoms that exist in this country. I know many organizations keep their head quarters in the US for that reason. As mentioned in the article you don’t want your currency at the mercy of some crazy leader.

      1. since 1500s there has been several different major reserve currencies, most recently the British Pound and the Dutch Guilder before that, i dont think any of these countries are less “free” than the US, it’s all about power.

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