Petrodollar Cracks: Saudi Arabia Considers Accepting Yuan For Chinese Oil Sales | ZeroHedge
Francesco Abbruzzino, The Uncensored Report, LLC
One of the core staples of the past 40 years, and an anchor propping up the dollar’s reserve status, was a global financial system based on the petrodollar – this was a world in which oil producers would sell their product to the US (and the rest of the world) for dollars, which they would then recycle the proceeds in dollar-denominated assets and while investing in dollar-denominated markets, explicitly prop up the USD as the world reserve currency, and in the process backstop the standing of the US as the world’s undisputed financial superpower.
Those days are coming to an end.
One day after we reported that the “UK is asking Saudis for more oil even as MBS invites Xi Jinping to Riyadh to strengthen ties“, the WSJ is out with a blockbuster report, noting that “Saudi Arabia is in active talks with Beijing to price its some of its oil sales to China in yuan,” a move that could cripple not only the petrodollar’s dominance of the global petroleum market – something which Zoltan Pozsar predicted in his last note – and mark another shift by the world’s top crude exporter toward Asia, but also a move aimed squarely at the heart of the US financial system which has taken advantage of the dollar’s reserve status by printing as much dollars as needed to fund government spending for the past decade.
