Would-be macro mavens and self-styled geopolitical observers harbor a lot of misconceptions about Saudi Arabia’s willingness and, more importantly, logistical wherewithal, to sell its oil for something other than hard currencies.

Westerners are inundated on a daily basis with Russian and Chinese propaganda, a lot of it disguised as macro commentary. I personally guarantee that a lot of you consume such content in mass quantities without realizing it. There are sell-side strategists caught up in it. And financial journalists. A few noted economists too.

I’m numb to it by now. It is what it is: A darkly amusing tragicomedy in which legions of dupes wholeheartedly believe they’re the smart ones. Counter-narrative’s often conflated with contrarian thinking, and contrarian thinking with shrewdness and perspicacity. Yevgeny Prigozhin — who, in addition to his warlord duties, ran Vladimir Putin’s troll farms — would be laughing if he weren’t so busy being dead.

The de-dollarization story’s one of the most popular narratives recycled and bounced around propaganda channels. Like a lot of the “best” such narratives, it’s not entirely false. But it’s overblown. Wildly overblown.

There are several sub-threads that fall under the de-dollarization umbrella, one of which is the “petroyuan” fable. It goes like this. The Saudis, increasingly wary of the petrodollar system and tired of being an American vassal state, are poised to “ditch the dollar” in favor of invoicing their oil in other currencies, including and especially the Chinese yuan.

That sounds straightforward enough in theory, but in practice it’s anything but. For one thing, the Saudis run a dollar peg. If you’re going to peg your currency to the dollar, it helps to have a lot of dollars on hand. It’s also useful — where useful means imperative — to maintain a generally cordial relationship with America, the sole legal issuer of genuine US dollars.

So, there’s that. But there’s more than that. A lot more. Let’s say you sell a bunch of oil for something other than dollars — yuan, for example. Congratulations, you’re CNY rich! Now what do you do with it? Your CNY, I mean? If you convert it to dollars (or euros or yen or sterling), the whole exercise was pointless. So, not that. You could buy gold, but gold has no internal rate of return, it’s cumbersome and so on.

Long story short, you need to recycle your yuan, which means you need CNY paper — bills, notes and bonds. Where’s that paper going to come from? Is there enough of it out there for a buyer the size of the Saudis looking to recycle proceeds from oil sales? Maybe at first. But Chinese banks need that paper too. So do a lot of other onshore intermediaries and investors. And there’s not an unlimited supply of it.

If there’s not enough CNY paper to support recycled Saudi export proceeds, Beijing would have to go into debt for the sole purpose of establishing and maintaining the new petroyuan system. Would they be willing to do that? Maybe. Yuan internationalization is a priority in Beijing. But I tend to doubt it.

Even if the Chinese were willing, would the Saudis really want to be into CNY in size? It’s not freely traded. And what about the riyal? What do you do with it? Peg it to CNY? That doesn’t make any sense: CNY’s soft-pegged to the dollar. And do you really want to make SAMA beholden to the vagaries of the PBoC? How do you replicate China’s multi-tiered rate system? What do you do in a month when the PBoC lowers the seven-day repo rate, keeps the one-year MLF and one-year LPR rates unchanged, but cuts the five-year LPR tenor? How do you replicate that domestically?

With all of that mind, I’m amused to inform you that Mohammed bin Salman allegedly threatened the French with bond sales if the G7 went through with a tentative plan to seize Russia’s frozen billions.

You’ll kindly recall that the US and Europe ultimately decided against formally seizing Russia’s assets in favor of diverting the interest income they generated to Ukraine by way of a US-guaranteed loan scheme. That was in June. According to Bloomberg, the Saudis were at work behind the scenes in April and May lobbying on behalf of Putin while the deliberations were ongoing in G7 capitals.

In an article published Tuesday, Daryna Krasnolutska, Jennifer Jacobs, and Alberto Nardelli said Prince Mohammed’s finance ministry made its opposition to asset seizures known to the G7, “with one person describing it as a veiled threat.” The Saudis mentioned French debt “specifically.”

The linked article — which’ll ricochet around the counter-narrative echo chamber and be leveraged in various de-dollarization coverage as “proof” of the Saudis’ preparedness to divest from the euro — went on to suggest that Riyadh’s light pressure campaign might’ve tipped the scales against “direct seizure” and in favor of the plan which leaves the assets themselves untouched and only taps the interest.

I personally like the interest-only plan because it leaves open the possibility of offering to release the frozen assets (which sum to $300 billion) at a later date as an incentive for a post-Putin Russia to democratize. But setting that aside, the response to the Crown Prince should’ve been, “Sell ’em. Sell your OATs today for all we care. You don’t own enough to matter anyway, and even if you did, the ECB will just turn around and buy enough to offset your redemptions.”

Try as I might, I can scarcely conjure a notion more ridiculous than a G7 nation setting its foreign policy based on one dictator’s lobbying efforts on behalf of another dictator, particularly when the second dictator is Vladimir Putin.

Riyadh of course denied the story. “No such threats were made,” the Saudi finance ministry told Bloomberg. Everyone’s favorite royals insisted their “relation[ship] with the G7 is of mutual respect.”

Apparently, the Saudis dropped the whole charade once the US and Europe decided against the outright seizure of Putin’s G7 claims. “It was unclear,” Krasnolutska, Jacobs and Nardelli wrote, if the Kingdom was merely concerned about a precedent that might one day be used against other autocracies (like Saudi Arabia) or acting “in solidarity with Russia.”

Either way, the G7’s response should’ve been the same: “F–k off, your Highness. Do your worst.”