Saudi ends petrodollar treaty

[Jason Harvestdancer]

While everyone is looking at the election, and the court trials attendant to the election, something significant elsewhere.

Saudi Arabia ends 80-year petrodollar deal with US for multi-currency sales

In Short

• Saudi Arabia ends 80-year petrodollar deal with US
• Deal allowed Saudi oil sales in US dollars only
• Saudi can now use other currencies like RMB, Euros, etc

Saudi Arabia ends 80-year petrodollar deal with US for multi-currency sales

Saudi Arabia has decided not to renew its 80-year petrodollar deal with the United States, which expired on Sunday, June 9, as per media reports.

This agreement, originally signed on June 8, 1974, had been a key part of US global economic influence.

The deal set up joint commissions for economic cooperation and Saudi Arabia's military needs. Back then, American officials hoped it would encourage Saudi Arabia to produce more oil and strengthen economic ties with Arab countries.

The petrodollar has been a key component of US foreign policy and US economic strength for decades. Times are going to be interesting.

 

[bilby]

While everyone is looking at the election, and the court trials attendant to the election, something significant elsewhere.

Saudi Arabia ends 80-year petrodollar deal with US for multi-currency sales

In Short

• Saudi Arabia ends 80-year petrodollar deal with US
• Deal allowed Saudi oil sales in US dollars only
• Saudi can now use other currencies like RMB, Euros, etc

Saudi Arabia ends 80-year petrodollar deal with US for multi-currency sales

Saudi Arabia has decided not to renew its 80-year petrodollar deal with the United States, which expired on Sunday, June 9, as per media reports.

This agreement, originally signed on June 8, 1974, had been a key part of US global economic influence.

The deal set up joint commissions for economic cooperation and Saudi Arabia's military needs. Back then, American officials hoped it would encourage Saudi Arabia to produce more oil and strengthen economic ties with Arab countries.

The petrodollar has been a key component of US foreign policy and US economic strength for decades. Times are going to be interesting.

What possible difference could this make, in a global economy where both fiat currencies and oil are traded freely?

There's literally no difference between a US$80.45 barrel of Brent Crude, a €75.12 barrel of Brent Crude, or a £63.20 barrel of Brent Crude.

 

[barbos]

What possible difference could this make, in a global economy where both fiat currencies and oil are traded freely?

Ask Muammar Gaddafi.

having said that, ability to force your currency on other rich countries allows you rent on financial operation, control over payments and lets you balloon your debt without inflation for prolonged time period.
US lost control over Russian financial transaction with their retarded bet that cutting Russia off SWIFT would destroy Russia,
Now you are going to lose control over SA.

 

[scombrid]

This and immigration are where the libertarians draw the line on free markets? No or only tightly controlled labor immigration to the US and force countries to use your currency?

 

[TV and credit cards]

Except it's all horsepucky.
Stories about the collapse of a longstanding ‘petrodollar’ agreement between the U.S. and Saudi Arabia spread like wildfire on social media. But the agreement never existed.

 

[Jason Harvestdancer]

This and immigration are where the libertarians draw the line on free markets? No or only tightly controlled labor immigration to the US and force countries to use your currency?

What position do you think I am taking on this?

 

[Jarhyn]

This and immigration are where the libertarians draw the line on free markets? No or only tightly controlled labor immigration to the US and force countries to use your currency?

What position do you think I am taking on this?

It's your responsibility to actually state your position if you disagree with the position others assume you have.

 

[Jason Harvestdancer]

This and immigration are where the libertarians draw the line on free markets? No or only tightly controlled labor immigration to the US and force countries to use your currency?

What position do you think I am taking on this?

It's your responsibility to actually state your position if you disagree with the position others assume you have.

scrobrid seems to think that I want to use force to have the Saudis keep the petrodollar.

I think I've got a pretty good track record on this forum of opposing the use of military force.

My position is "you were warned and our prediction came true." Now what does scombrid think I was advocating?

 

[Jarhyn]

My position is "you were warned and our prediction came true."

That isn't a position, that's a statement (and a false one apparently, since the petrodollar is apparently a myth in the first place).

What is your POSITION? What are your "oughts", and what actions do you authorize in your name to accomplish them?

 

[barbos]

Except it's all horsepucky.
Stories about the collapse of a longstanding ‘petrodollar’ agreement between the U.S. and Saudi Arabia spread like wildfire on social media. But the agreement never existed.

The Great Joseph Adinolfi, the Speaker of Ultimate Truth has spoken! That is the truth. All discussions end now!

 

[bilby]

My position is "you were warned and our prediction came true."

What is the harmful situation about which we were warned?

It doesn't strike me as problematic for literally anyone, that Saudi Arabia might sell oil for money, no matter in what currency that money is denominated. Certainly their choice of which currencies they sell for doesn't affect America, or Americans.

It might have eighty years ago. It could perhaps have even fifty years ago. But today, both oil and fiat currencies are highly liquid trade items, so it's completely irrelevant what particular currency is specified in any trade contact or deal.

I am waiting for you to explicitly define the problem that you clearly believe to exist here.

But I have the distinct impression that it could be a VERY long wait.

 

[Jason Harvestdancer]

One of the reasons the dollar is as strong as it is, and one of the reasons the US has been able to go into far more debt than any other sovereign country can reasonably expect to do so, is the non-myth of the petrodollar. During the petrodollar era, anyone who wanted to purchase oil needed dollars with which to do so. That means other nations and people in other nations needed the dollar, which made the dollar a stronger currency.

Without this backing, the value of the dollar decreases. That is not some faint conjecture. It is exactly what is going to happen.

The dollar is already strained. The problems of debt and inflation are causing real economic turmoil already. Without this support, this means that we are indeed looking forward to some really difficult times financially. It is my opinion that we are watching the fall of empire in real time.

There, I've elaborated on my position. NOW will scrobrid tell us what he thinks I was advocating?

But I have the distinct impression that it could be a VERY long wait.

Of course and as usual. The fact that scrobrid won't answer my question is proof that I don't answer questions.

 

[Jarhyn]

One of the reasons the dollar is as strong as it is, and one of the reasons the US has been able to go into far more debt than any other sovereign country can reasonably expect to do so, is the non-myth of the petrodollar. During the petrodollar era, anyone who wanted to purchase oil needed dollars with which to do so. That means other nations and people in other nations needed the dollar, which made the dollar a stronger currency.

Without this backing, the value of the dollar decreases. That is not some faint conjecture. It is exactly what is going to happen.

The dollar is already strained. The problems of debt and inflation are causing real economic turmoil already. Without this support, this means that we are indeed looking forward to some really difficult times financially. It is my opinion that we are watching the fall of empire in real time.

There, I've elaborated on my position. NOW will scrobrid tell us what he thinks I was advocating?

But I have the distinct impression that it could be a VERY long wait.

Of course and as usual. The fact that scrobrid won't answer my question is proof that I don't answer questions.

So, I'm not seeing anything that invalidates the theory that your "position" is in fact "strongarm others into using the dollar by threat of force if they stop, secured via sucking the dick of a violent fascist state."

Or, we could just... you know... Make oil obsolete.

 

[Jason Harvestdancer]

One of the reasons the dollar is as strong as it is, and one of the reasons the US has been able to go into far more debt than any other sovereign country can reasonably expect to do so, is the non-myth of the petrodollar. During the petrodollar era, anyone who wanted to purchase oil needed dollars with which to do so. That means other nations and people in other nations needed the dollar, which made the dollar a stronger currency.

Without this backing, the value of the dollar decreases. That is not some faint conjecture. It is exactly what is going to happen.

The dollar is already strained. The problems of debt and inflation are causing real economic turmoil already. Without this support, this means that we are indeed looking forward to some really difficult times financially. It is my opinion that we are watching the fall of empire in real time.

There, I've elaborated on my position. NOW will scrobrid tell us what he thinks I was advocating?

But I have the distinct impression that it could be a VERY long wait.

Of course and as usual. The fact that scrobrid won't answer my question is proof that I don't answer questions.

So, I'm not seeing anything that invalidates the theory that your "position" is in fact "strongarm others into using the dollar by threat of force if they stop, secured via sucking the dick of a violent fascist state."

Other than the fact that I've stated in this thread that that is not my position, I suppose with the aid of potent LSD one could find that in my post.

Now have I passed enough tests to earn the right ask someone else to also clarify their post?

 

[Canard DuJour]

Gotta love "Petrodollars".

The term originally meant - as far as anyone can tell - that part of the US current account surplus, 50-odd yrs ago that derived from net energy exports, and has, since, come to mean nearly the opposite, and everything in between, depending on who decries them.

"Eurodollars" is similar open-source, equal-opportunity b/s definition fodder.

 

[bilby]

During the petrodollar era, anyone who wanted to purchase oil needed dollars with which to do so.

That is simply not true. You can buy oil in any currency the seller will accept, and oil is an internationally traded commodity. If the Saudis were ever daft enough not to accept euros, pounds, or yen, then the buyers with those currencies could buy from someone else. Royal Dutch Shell or British Petroleum don't insist on US dollars for buying or selling.

And if they did, it wouldn't affect the value of the dollar, because you can freely trade currencies - if you use euros to buy US dollars, give them in exchange for oil to some guy in Riyad, and he immediately sells them for Saudi riyals, so he can buy a cup of coffee and a loaf of bread with them, the net effect on the US dollar is zilch.

The petrodollar isn't even a thing. It's of zero relevance to anything in the twenty-first century, and is a desparate attempt by people who hate and fear the reality of fiat currency to insist, counterfactually, that money has value due to a peg to a commodity.

Commodity money is dead, and good riddance. Oil isn't money; Gold isn't money. You can buy these things with money, but then, you can buy anything with money (even other kinds of money) - that's it's entire point.

 

[bilby]

Without this backing, the value of the dollar decreases. That is not some faint conjecture.

Oh, so you have evidence of it having happened?

It is exactly what is going to happen.

So, a forward looking statement, in place of actual evidence. AKA "some faint conjecture".

Markets don't take days to respond to events. Futures markets even respond in anticipation of events. If the dollar was going to fall as a result of this, it would already have done so.

If you think it will, and that the markets are deluding themselves by continuing as though it will have zero effect, then now is your opportunity to short the US dollar, and make yourself rich when it collapses.

 

[Jason Harvestdancer]

During the petrodollar era, anyone who wanted to purchase oil needed dollars with which to do so.

That is simply not true. You can buy oil in any currency the seller will accept, and oil is an internationally traded commodity.

So far what you say is technically true, but you forget something important - government do make decisions that are economically bad, and do so often.

If the Saudis were ever daft enough not to accept euros, pounds, or yen, then the buyers with those currencies could buy from someone else. Royal Dutch Shell or British Petroleum don't insist on US dollars for buying or selling.

However, the decision was made to sell in dollars.

And if they did, it wouldn't affect the value of the dollar, because you can freely trade currencies - if you use euros to buy US dollars, give them in exchange for oil to some guy in Riyad, and he immediately sells them for Saudi riyals, so he can buy a cup of coffee and a loaf of bread with them, the net effect on the US dollar is zilch.

Not zilch, as using euros to buy dollars increases the value of the dollars.[/quote]

The petrodollar isn't even a thing. It's of zero relevance to anything in the twenty-first century, and is a desparate attempt by people who hate and fear the reality of fiat currency to insist, counterfactually, that money has value due to a peg to a commodity.

Well, it's not a thing anymore, so you're technically right about it not being even a thing.

Commodity money is dead, and good riddance. Oil isn't money; Gold isn't money. You can buy these things with money, but then, you can buy anything with money (even other kinds of money) - that's it's entire point.

The economy of the US and much of the world has been so severely distorted in the past century that opinions like the one above are common. It's sad, really.

 

[Jarhyn]

One of the reasons the dollar is as strong as it is, and one of the reasons the US has been able to go into far more debt than any other sovereign country can reasonably expect to do so, is the non-myth of the petrodollar. During the petrodollar era, anyone who wanted to purchase oil needed dollars with which to do so. That means other nations and people in other nations needed the dollar, which made the dollar a stronger currency.

Without this backing, the value of the dollar decreases. That is not some faint conjecture. It is exactly what is going to happen.

The dollar is already strained. The problems of debt and inflation are causing real economic turmoil already. Without this support, this means that we are indeed looking forward to some really difficult times financially. It is my opinion that we are watching the fall of empire in real time.

There, I've elaborated on my position. NOW will scrobrid tell us what he thinks I was advocating?

But I have the distinct impression that it could be a VERY long wait.

Of course and as usual. The fact that scrobrid won't answer my question is proof that I don't answer questions.

So, I'm not seeing anything that invalidates the theory that your "position" is in fact "strongarm others into using the dollar by threat of force if they stop, secured via sucking the dick of a violent fascist state."

Other than the fact that I've stated in this thread that that is not my position, I suppose with the aid of potent LSD one could find that in my post.

Now have I passed enough tests to earn the right ask someone else to also clarify their post?

Treaties are agreements to the use of force in the event of violation.

They are secured by sucking political dick.

Any treaty with SA is sucking the political dick of a fascist theocracy.

Therefore your position seems to be "prop up the dollar through sucking the dick of a fascist state, to be enforced via violence".

How is this so hard for you to understand?

 

[Jason Harvestdancer]

Treaties are agreements to the use of force in the event of violation.

True.

They are secured by sucking political dick.

True

Any treaty with SA is sucking the political dick of a fascist theocracy.

True

Therefore your position seems to be "prop up the dollar through sucking the dick of a fascist state, to be enforced via violence".

False, it is not my position that we must maintain this treaty. It is my position that the end of this treaty is an inevitable step in the end of US hegemony. It is not my position that the US must, or even can, do anything about it.

How is this so hard for you to understand?

The parts you simply made up are hard to understand. Perhaps you can explain to me how you know what my position is better than I do. Are you claiming to have psychic abilities?