{"id":27237,"date":"2017-10-25T08:43:52","date_gmt":"2017-10-25T13:43:52","guid":{"rendered":"http:\/\/olduvai.ca\/?p=27237"},"modified":"2017-10-25T08:43:52","modified_gmt":"2017-10-25T13:43:52","slug":"gold-backed-petro-yuan-silliness-reserve-currency-curse","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=27237","title":{"rendered":"Gold-Backed Petro-Yuan Silliness: Reserve Currency Curse?\u00a0"},"content":{"rendered":"
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Gold-Backed Petro-Yuan Silliness: Reserve Currency Curse?\u00a0<\/span><\/a><\/h3>\n<\/div>\n
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A massive amount of hype is spreading regarding China’s alleged ambitions to dethrone the dollar. The story this time involves China’s plan is to price oil in yuan using a gold-backed futures contract. Even if that were true, the impact would be zero. Nonetheless, CNBC is now in on the hype.<\/section>\n<\/div>\n<\/header>\n
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CNBC reports China has grand ambitions to dethrone the dollar. It may make a powerful move this year<\/a>.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Yuan pricing and clearing of crude oil futures is the “beginning” of a broader strategic push “to support yuan pricing and clearing in commodities futures trading,” Pan Gongsheng, director of the State Administration of Foreign Exchange, said last month.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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To support the new benchmark, China has opened more than 6,000 trading accounts for the crude futures contract, Reuters reported in July.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Yawn.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Jeff Brown, president at FGE, an international energy consultant has a more accurate assessment. “Most counterparties will not want anything to do with this contract as it adds in a layer of cost and risk. They also don’t like contracts with only a few dominant buyers or sellers and a government role.”<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Priced-In Madness<\/strong><\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Repeat after me: It’s meaningless what currency oil is quoted in. Once you understand the inherent truth in that statement, you immediately laugh at headlines like that presented on CNBC.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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For those who do not understand the simple logic, consider the fact that one does not need to have dollars to buy oil. Currencies are fungible. In less than a second, and at ant time day or night, one can convert any currency to any other currency.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n","protected":false},"excerpt":{"rendered":"

Gold-Backed Petro-Yuan Silliness: Reserve Currency Curse?\u00a0 A massive amount of hype is spreading regarding China’s alleged ambitions to dethrone the dollar. The story this time involves China’s plan is to price oil in yuan using a gold-backed futures contract. Even if that were true, the impact would be zero. Nonetheless, CNBC is now in on […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,5],"tags":[16670,14648,13390,6466,679,827,839],"class_list":["post-27237","post","type-post","status-publish","format-standard","hentry","category-economics","category-geopolitics","tag-currency-china","tag-michael-shedlock","tag-mishtalk","tag-petroyuan","tag-reserve-currency","tag-united-states","tag-us-dollar"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27237","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=27237"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27237\/revisions"}],"predecessor-version":[{"id":27238,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27237\/revisions\/27238"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=27237"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=27237"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=27237"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}