{"id":64799,"date":"2023-01-20T08:11:03","date_gmt":"2023-01-20T13:11:03","guid":{"rendered":"https:\/\/olduvai.ca\/?p=64799"},"modified":"2023-01-20T08:11:03","modified_gmt":"2023-01-20T13:11:03","slug":"contrarian-thoughts-on-the-petro-yuan-and-gold-backed-currencies","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=64799","title":{"rendered":"Contrarian Thoughts on the Petro-Yuan and Gold-Backed Currencies"},"content":{"rendered":"

Contrarian Thoughts on the Petro-Yuan and Gold-Backed Currencies<\/a><\/h3>\n
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Rather than cheer the concept of a new currency, we’re better served to look at the velocity of that currency and the cycles of investing that currency in assets denominated in that currency for a low-risk return.<\/i><\/p>\n

Longtime readers know not to expect me to rubber-stamp anything, be it the status quo or proposed alternatives.<\/b>\u00a0Our interests are best served by screening everything through the mesh of independent analysis, a.k.a. contrarianism. Which brings us to the two sources of alt-media excitement in the currency space, the\u00a0petro-yuan<\/i>\u00a0and another wave of proposed\u00a0<i<>gold-backed currencies.<\/p>\n

I’m all for competing currencies. The more transparent and open the market for currencies, the better.<\/b>\u00a0In my view, everyone should be able to buy and trade whatever currencies they feel best suits their goals and purposes.<\/p>\n

In all the excitement over de-dollarization, some basics tend to get overlooked.<\/b><\/p>\n

1. The yuan remains pegged to the US dollar, so it remains a proxy for the USD.<\/b>\u00a0It will only become a true reserve currency when China lets the yuan float freely on the global FX market and yuan-denominated bonds also float freely on global bond markets. In other words, a currency can only be a reserve currency rather than a proxy if the price and risk of the currency is discovered by global markets, not centralized monetary\/state authorities.<\/p>\n

2. Most commentators stop on first base of the oil-currency cycle:<\/b> China buys oil from exporting nations by exchanging yuan for oil. So far so good. But what can the oil exporters do with the yuan? That’s the tricky part: the petro-yuan has to work not just for China but for the oil exporters who will be accumulating billions of yuan.<\/p>\n

\u2026click on the above link to read the rest\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Contrarian Thoughts on the Petro-Yuan and Gold-Backed Currencies Rather than cheer the concept of a new currency, we’re better served to look at the velocity of that currency and the cycles of investing that currency in assets denominated in that currency for a low-risk return. Longtime readers know not to expect me to rubber-stamp anything, […]<\/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":[24078,130,33599,587,588,6466,827,839,5482],"class_list":["post-64799","post","type-post","status-publish","format-standard","hentry","category-economics","category-geopolitics","tag-charles-hugh-smith-2","tag-china","tag-gold-back-currency","tag-of-two-minds","tag-oil","tag-petroyuan","tag-united-states","tag-us-dollar","tag-world-reserve-currency"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64799","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=64799"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64799\/revisions"}],"predecessor-version":[{"id":64800,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64799\/revisions\/64800"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=64799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=64799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=64799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}