The petrodollar system is the reason foreign count

first_img The petrodollar system is the reason foreign countries keep such large US dollar reserves. Now China is set to hit the petrodollar with a mortal blow… Why the US Dollar Is So Special The petrodollar system is the big reason the US dollar is so unique. Here’s how it works… Oil is by far the largest and most strategic commodity market in the world. And, until recently, virtually anyone who wanted to import oil needed US dollars to pay for it. Every country needs oil. And if foreign countries need US dollars to buy oil, they have a very compelling reason to hold large dollar reserves. This creates a huge artificial market for US dollars. It also gives a tremendous boost to anyone who lives in the US or holds US dollars. Nick Giambruno and Ron Paul A new technology is about to put big pharma out of business… And an FDA anomaly this December could be the catalyst that brings this new biotech to the forefront. For a limited time, you can watch our brief video presentation, The Biggest Medical Breakthrough Since Antibiotics. Click here to see the best way to play this medical breakthrough. China Wants Pricing Power One of China’s key goals here is to reduce the dollar’s influence over oil pricing. China is the world’s largest oil importer. Developing the new crude contract gives it some global pricing power. Currently, most of the $1.7 trillion worth of oil traded each year is priced off of two US dollar-denominated crude benchmarks: West Texas Intermediate (WTI) and Brent. Beijing thinks the yuan crude contract will reflect the market conditions in Asia better. It could become the most important oil benchmark in Asia. The vice-chairman of the China Securities Regulatory Commission recently said: The country will make crude oil futures the new starting point of opening up all futures markets… And then, we will allow foreign players, whose enthusiasm is very high at present, to enter other futures markets, such as iron ore and PTA, when conditions are ripe. In other words, oil is just the beginning. Eventually, China plans to challenge the dollar’s dominance over all commodities. 4%, it would need over $1.2 trillion, or over half of what it currently snatches from taxpayers—again, just to pay the interest. 2%, it would need over $800 billion. Why Medium Sour Crude? The INE crude futures will be priced in yuan per barrel and be for 1,000 barrels. Brent and WTI futures contracts are for light, sweet crude. “Light” means it has relatively low density, and “sweet” means it has a low sulfur content. The INE contract, on the other hand, will be for medium sour crude. There are a handful of reasons for this: Silicon Valley Rocket Scientist Declares: An anomaly at the FDA could launch a new biotech industry 35,000% starting December 19 Clearly, none of this is sustainable. Trump was correct last year when he noted: “What happens if that interest rate goes up 2, 3, 4 points? We don’t have a country.” In many ways, this could turn into President Trump’s financial 9/11. The petrodollar system has allowed the US government and many Americans to live way beyond their means for decades. The US takes this unique position for granted. But it will disappear once the petrodollar system breaks down. When that happens, inflation could be severe. This will likely be the tipping point… Afterward, the US government will be desperate enough to implement capital controls, people controls, nationalization of retirement savings, and other forms of wealth confiscation. I urge you to prepare for the economic and sociopolitical fallout while you still can. Expect bigger government, less freedom, shrinking prosperity… and possibly worse. It’s probably not going to happen tomorrow. But it’s clear where this trend is headed. It is very possible that one day soon, Americans will wake up to a new reality. Until next time, Nick Giambruno Editor, Crisis Investing P.S. I started to see the pieces falling into place late last year. That’s why I told readers the death of the petrodollar would be the No. 1 black swan event of 2017. Eventually, I think people will look back and see China’s Golden Alternative as the catalyst that made it happen. We recently released a video that shows how it could all go down… Click here to watch it now. Reader MailbagToday, one reader’s skepticism of the crypto mania… It is understood there is a real chance of cyber warfare in the future where all internet, and possibly all computer activities, might be affected (in which case, only older VW beetles might continue to work because they have no computer components). If this is the case, then cryptocurrencies, whether government currency or otherwise, would be frozen, along with credit and bank cards. This means, of course, that only physical currency such as precious metals would be an acceptable transaction medium—real money! Yours truly, astounded at the crypto mania.—Vern We’d love to hear from you. If you have a question or comment on the Dispatch, you can send it to us right here. Medium sour crude oil accounts for over 40% of global crude output, but there is currently no price benchmark for it. The first major “win” for the Trump Presidency The mainstream press hasn’t written a word about HR 835… But Congress’s new bill has already helped send one little-known market soaring 1,025%… And according to a Goldman Sachs insider, prices could rocket 4,900% higher in the months ahead. There’s still time for you to get in – if you act before Trump signs HR 835 into law (no later than December 31). “There is a wall of money coming,” says one hedge fund manager, “and we’ll see an explosion in prices.” Click here for the full story. Bottom line, it will allow oil producers to sell oil for gold. Producers will be able to completely bypass the petrodollar system and any restrictions/regulations/sanctions of the US financial system. I recently spoke with the officials at the exchange. They told me they plan to go live with the INE crude contract before the end of the year. Immediately convert the yuan they receive from selling oil into physical gold at the spot price for immediate delivery. Recommended Linklast_img