Crossing the financial Jordan on Abib 10, March 26, 2018
Mar 04, 2018
The petro-dollar has been the world currency for a long time. When it was in danger of collapse in the early 1970’s, President Nixon switched from a gold-backed dollar to an oil-backed dollar, now known as the petro-dollar.
All countries had to pay for oil in US dollars. That was the deal that was made with Saudi Arabia in exchange for an increase in the price of crude oil. The Saudis also agreed to reinvest their petro-dollars into US bonds to support the value of the dollar.
But in recent years things have been changing. The US government has used its dollar-power as a weapon of mass economic destruction on any country that it did not like. We invaded countries like Iraq and Libya because they tried to sell their oil for euros instead of dollars. Those “bad” dictators were overthrown, while the “good” dictators continued to profit from their relationship with the US government.
But now with the rise of Chinese power in the world, the US dollar is being challenged. The latest development is that China is now about to sell oil futures contracts that are denominated in yuan, rather than in dollars. What Iraq and Libya failed to accomplish is being done by China, and there is little that the US government can do about it.
The power of money undergirds all military and political power. The Fed’s money power is slowly coming to an end. China has done this slowly, not wanting to spark an all-out war. But this is a major turning point, set to begin March 26, Abib 10, the day that Israel crossed the Jordan onto the plains of Jericho (Joshua 4:19).
In a move that could upend the pricing and trading of one of the world’s most actively traded commodities, China plans to finally launch its long-awaited and delayed yuan-denominated oil futures contract on March 26, Reuters reported on Friday, quoting two sources familiar with the latest developments.
China has been preparing to launch its oil futures contract for years and has postponed or shelved plans several times, but it looks like now it is close to launching an oil futures contract that will give it more clout in crude pricing and promote its currency as a truly global one.
With the contract, to be launched on the Shanghai International Energy Exchange, or INE, China hopes to create an Asian crude oil benchmark that would better reflect pricing for the oil imported and consumed in the world’s top importing region, Asia, and the world’s largest oil importer, China.