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- Thread starter bd popeye
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I used to mock the mullahs for their incompetence but now it seems that it's time to sign a solemn apology form :'-)
That's because the mullahs got bombed and the Ayatollah is dead, which is honestly a net positive. It's about time the IRGC hardliners just took over.
It's not actually China's official policy to run massive trade surplus, China only do so right now because USD is currently the reserve currency and China needs reserves to maintain financial security against a hostile US.
Oil trade in RMB also doesn't imply China must run a deficit, unlike America China actually makes stuff, you can very much have a world where China makes everything while everyone else sells resources and agricultural products to China in exchange for them. Or they can try competing against Chinese companies in high tech products, China also isn't afraid of competition.
A lot of arguments for why you don't want RMB internationalization is based on the implicit assumption that USD is still the reserve currency and things like oil will still be priced in USD. So to answer your question: countries can aquire more RMBs by selling stuff to oil producing countries who pays them in RMB, RMB they received from China in exchange for oil, hence the utility of pricing oil in RMB.
As for America, they can starve to death for anyone cares.
I think America really lucked out they f*ed up in Iran rather before going against China.
Imagine starting war with China believing China wasn't suppose to bomb Okinawa or Guam.
Or worse, that China wasn't suppose to land troops and occupy those island chain bases America is nice enough to build for China.
Imagine starting war with China believing China wasn't suppose to bomb Okinawa or Guam.
Or worse, that China wasn't suppose to land troops and occupy those island chain bases America is nice enough to build for China.
manqiangrexue
Brigadier
I think this is great for China too because although China was always preparing to strike all of America's Asian bases with our DF arsenal, there was always mental apprehension and hesitation to strike a country first before they declare themselves a participant of the war. Iran showed us that there is no place for that hesitation. If all their bases are destroyed, they will ask for peace; if you spare their bases hoping for peace, they will use them for war. No US vassal cares who attacked whom first; they have no sense of right or wrong at all. What everyone cares about is what they can still do to you vs what you can do to them and by starting out striking all US bases in Japan, S Korea, Philippines, etc... China sends the right message that they have nothing left to even hope to do anything to us but we can do anything and everything to the rest of their countries.
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plawolf
Lieutenant General
That right there is called putting in ye cart in front of the horse.
You talk about replacing the petrodollar with the petroyuan like it’s the easiest thing in the world and a forgone conclusion, when in reality it will be one of the hardest things to do in isolation, because America and all the vested interests who currently benefit from the status quo will fight like hell to preserve the petrodollar as the most important economic pillar underpinning America wealth and power.
In normal course of events, that’s so far off over the Horizon that China isn’t really seriously actively planning for it yet as in theory, the petrodollar can survive a crushing American military defeat in East Asia and all American influences getting pushed back to Hawaii and beyond.
Because in order to end the petrodollar, you need to exert military control of ME oil. If America played its cards right, it would have made that extremely difficult for China, as a Chinese naval expeditionary forces will need to cross multiple geographic choke points controlled by America and American lackies; many many American regional bases, the USN and potentially having to deal with India as well. All to have extremely long and vulnerable supply lines to secure even if you can win the head on fight against US forces.
The current Iran debacle is an absolute godsend for China, potentially shaving well over a decade off of China’s most optimistic projected timelines.
Yes replacing the petrodollar with the petroyuan will have some downsides, but you are totally ignoring the colossal benefits of firstly financially ruining the US and massively increasing the likelihood of Civil War 2.0; Essentially free oil and gas, default dominance of world finances and transactions. The list is massive.
Once you have the petroyuan, you can easily replace it with a new non-national currency of your choice, and at that point you will have countries lining up and fighting each other to get a piece of the action, and you can write the rules for how this new currency is going to be governed from a position of absolute strength to make sure you get all the benefits and as few of the downsides as possible. That’s a far better deal that China could have ever dreamed of being able to get if it was to try and displace the petrodollar slowly and peacefully. Trump just gave China the gift horse of the millennium, and China is sure as shit not going to turn its nose up at it.
Your complaining is essentially equivalent to moaning about all the extra taxes you will have to pay if you win the lottery jackpot.
There is a big difference between China's RMB internationalization and Dollar being reserve currency. Any currency is only a representation of what that country produces that is actually needed and consumed by someone. China want RMB to be used to buy Chinese product and service. China does not print any extra RMB paper more than what China provides. On the contrary, USD is over-printed without backing of its own production. Petro dollar is precisely doing that over-printing backed NOT by goods but by US military.
So no, Chinese economy policy makers do not agree with US conterparts in almost every way. Trade deficit is nothing preventing RMB internationalization, it may prevent other's to buy Chinese products but for everything they CAN buy from China, they got to pay with some currency and China want it to be paid in RMB instead of USD. They earn these RMBs by selling something real too. So there is no "fake" money in this loop.
This also means that there won't be anything called "petroyuan" like petrodollar, because RMB is not going to be linked to oil like USD does. RMB is only backed by China's products.
Just one observation related to what you described. The petrodollar is effectively already finished, even without some formal petroyuan system being established.
Because if the GCC countries cannot export energy normally, meaning they can no longer keep propagating the petrodollar system the way they used to, then the whole mechanism is already being nullified in practice - at least temporarily.
And that would have massive consequences for the US, its absurd debt load, its hidden inflation, its stock market bubbles, and the whole fake structure sitting on top of them.
A link in the chain has been broken; it is just that these aftershock effects do not hit all at once. They take a bit of time to settle in and show up fully inside the US.
The only real way that calamity could still be avoided, and this process reversed, is if they have enough brain cells left to accept Iranian terms of surrender now, whatever form that takes, reparations, sanctions relief, GCC tribute, pulling out bases, bringing China and Russia into the whole process, and so on.