Friday, September 15, 2017

Zero Hedge — Venezuela Begins Publishing Oil Basket Price In Yuan

Fast forward to today, when according to a statement on the Venezuela oil ministry, the country's weekly crude oil and petroleum basket "will be published in Chinese Yuan" - oddly, not in Euros as the WSJ hinted - going forward. We can only assume that Venezuela avoided the European currency on concerns that Brussels may follow in D.C.'s footsteps and impose financial sanctions on the Maduro regime next. Which meant that the only "safe" currency to transact in, was that of the country's two big sources of vendor (and commodity) financing: China and Russia. For now Venezuela has picked the former....
This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan. Inbuilt in the move is a true Chinese win-win; the yuan will be fully convertible into gold on both the Shanghai and Hong Kong exchanges.
The new triad of oil, yuan and gold is actually a win-win-win. No problem at all if energy providers prefer to be paid in physical gold instead of yuan. The key message is the US dollar being bypassed....
Zero Hedge
Venezuela Begins Publishing Oil Basket Price In Yuan
Tyler Durden

3 comments:

Matt Franko said...

"oil, yuan and gold...."

Sounds like the turd world is finally catching up to the 1880s.....

Dan Lynch said...

I sure hope this devalues the dollar so American manufacturing can be more competitive.

Matt Franko said...

Dan if he USD Zombies there instead become even more desperate the USD could go up....

It will depend on what the terms of trade are....

Rote MMT 101: "price not quantity...."