Is China Out to Dethrone the Dollar?

In the Crux article ‘The world will never trade oil in just U.S. dollars again,’ China’s big announcement was detailed and a possible major blow to the U.S. dollar. Excerpts from Steve Sjuggerud’s True Wealth China Opportunities brought to light this major development, but it was an announcement that drew very little attention in the media. Take a look:

The world will never trade oil in just U.S. dollars again… At least, that’s the goal of the Chinese government. The Chinese want oil to trade not just in U.S. dollars… but also in China’s currency, the yuan. And the Chinese government recently announced a plan to make it happen.

It’s a crafty plan. It has the potential to change everything. It is likely NOT a good thing for the U.S. – but there’s not much the U.S. can do to stop it. If it works, this will be the start of a huge shift of economic power… a shift away from the U.S. and toward China.

More importantly, it could be the first step toward China’s yuan competing with the U.S. dollar as the world’s “reserve” currency. I know, I know. This all sounds a little crazy. The dollar hasn’t had competition like this in generations. But earlier this month, the Chinese made a groundbreaking statement.

Most folks missed it, or didn’t truly understand the magnitude of it. But it changes everything… On September 1, the Nikkei Asian Review reported that, “China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into gold.”

If China’s plan goes as planned, global demand for the Yuan would continue to rise while demand for the dollar would wane. Steve spelled out something else, crucial to U.S. foreign policy, that would wane as well, the ability to enforce global compliance through economic sanctions. Think this could never happen? Russian and Iran are already eager to circumvent the dollar. In the case of Iran, this could essentially make the U.S. sanctions against that nation null and void. It is not hard to see how rouge nations could thrust ahead with their nuclear programs without the hurdles of severe economic sanctions levied against them.

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