The largest geo-economic change in the last fifty years was arguably implemented (in 1971 when Nixon closed the gold/dollar window and) the main source of economic reliability transferred from gold to dollars, specifically to US treasury bills, (and) in 1973 with the agreement between OPEC, Saudi Arabia and the United States to sell oil exclusively in dollars. (Under this arrangement, the Saudis only accepted) dollars as a payment for oil and related investments, recycling billions of excess dollars into US treasury bills and other dollar-based financial resources. In exchange, Saudi Arabia and other OPEC countries came under American military protection.
The second factor … is the dollar becoming the world reserve currency and maintaining a predominant role in the basket of international foreign-exchange reserves of the IMF ever since 1981. The role of the dollar, linked obviously to the petrodollar trade, has almost always maintained a share of more than 40% of the Special Drawing Right (SDR) basket, while the euro has maintained a stable share of 29-37% since 2001. In order to understand the economic change in progress, it is sufficient to observe that the yuan is now finally included in the SDR, with an initial 10% share … .
The reason why the United States has been able (until now) to fuel this global demand for dollars is linked to the need for other countries to own dollars in order to be able to buy oil and other goods. … The United States found itself in the enviable position of being able to print pieces of paper (simply IOU’s) without any gold backing and then exchange them for real goods. … even as it accumulates an astronomical public debt (about 21 trillion dollars). …
(Since) the late 1990s, at a time of expansion for the US empire following the demise of the Soviet Union (the US has sought to prevent) China, Russia and Iran from creating a Eurasian area of integration. … Until a few decades ago, any idea of straying away from the petrodollar was seen as a direct threat to American global hegemony, requiring of a military response. (Since the) 2008 financial crisis, as well as growing US aggression ever since the events in Yugoslavia in 1999 … The United States finds itself being considered by many countries to be a massive war apparatus that struggles to get what it wants … .
In 2017, given the decline in US credibility … a general recession from the dollar-based system is taking place in many countries. … It has become clear to many nations opposing Washington that the only way to adequately contain the fallout from the collapsing US empire is to progressively abandon the dollar. …
This is essential in the Russo-Sino-Iranian strategy to unite Eurasia and thereby render the US irrelevant. … Eliminating the unlimited spending capacity of the Fed and the American economy means limiting US imperialist expansion … . Russia began (with the rise of Putin in 2012) to de-dollarize, repaying foreign debts in dollars … . Russia is today one of the countries in the world with the least amount of public and private debt denominated in dollars … .
It is no secret that Beijing and Moscow are aiming for a gold-backed currency if and when the dollar should collapse. This has pushed unyielding countries to start operating in a non-dollar environment and through alternative financial systems.
(This) can be seen with Saudi Arabia, which has represented the crux of the petrodollar. … Beijing has started putting strong pressure on Riyadh to start accepting yuan payments for oil instead of dollars, as are other countries such as the Russian Federation. … Beijing will (also) buy gas and oil from Russia by paying in yuan, with Moscow being able to convert yuan into gold immediately thanks to the Shanghai International Energy Exchange. This (new oil-)gas-yuan-gold mechanism signals a revolutionary economic change through the progressive abandonment of the dollar in trade.
After the US imposed financial sanctions on Venezuela in an effort to … choke the Maduro regime, … Caracas (announced) that those who wished to trade Venezuelan crude would have to do so in Chinese Yuan … . Today during an energy summit held in Moscow, Venezuela’s president Nicolas Maduro proposed … that all oil producing countries discuss creating a currency basket for trading crude and refined products. One which is no longer reliant on the (petro) dollar. …
Maduro also blamed trade in crude oil paper futures as having an adverse impact on the oil market, which has undermined attempts by OPEC to stabilize prices. … Maduro proposed (that) an alternative currency basket (would) mitigate the alleged adverse impact of futures trading.
(Imo, what will really put the squeeze on energy futures trading – I say will, not would, because it looks like Russia and China and other countries are doing it – will be digitizing their national resources and trading them on the blockchain.)