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Posted on Sustainabilitank.info on May 19th, 2014
by Pincas Jawetz (pj@sustainabilitank.info)

 

 

Exit the Petrodollar, Enter the Gas-o-Yuan?

Also Think of the BRICS, supported by the Shanghai Cooperation Organization, that within the G20, are the new grouping that intends to stand up to NATO and the G7 and is meeting in July 2014 in Brazil to establish a $100 billion  BRICS development bank, announced in 2012, to be a potential alternative to the US led UN’s International Monetary Fund (IMF) and the World Bank – as a source of project financing for the developing world – with the former 120 NAM (Non Aligned Movement) Nations solidly aligned with the China-Russia led, and gas fed, new result of Asia’s own “Pivoting” that is evolving since Washington’s own “RESET to Asia” policy. This is no less then a World reorganization to change the post WWII architecture that rebuilt Europe and established the UN. Now a China led new structure is the result of China becoming the World’s largest economy, a new Sino-Russia relationship, and the Shanghai Cooperation Organization,

More BRICS cooperation meant to bypass the dollar is reflected in the “Gas-o-yuan,” as in natural gas bought and paid for in Chinese currency. Gazprom is even considering marketing bonds in yuan as part of the financial planning for its expansion. Yuan-backed bonds are already trading in Hong Kong, Singapore, London, and most recently   Frankfurt.

Above stresses the importance of the largest BUYER in the fossil fuels market, whose currency then becomes the World’s Reserve currency. Hence the dollar that bought Arab oil might now be replaced by the Yuan that buys Russian gas. Strange as it might seem, but the dependence on these imports of energy matter is the reasurance of the stability of the buyer’s currency – that needs no-more to show it has large reserves of Gold to gain the needed credibility.

We strongly recommend the following link and TomDispatch.com Asian correspondent’s Pepe Escobar’s look at what he sees as the start of Cold War II with these “resets” and “pivots” and the Shanghai Cooperation Council. He also looks at Washington and sees there the start of a Cold War 2.0 mentality that stresses military hardware expense allowing for a neglect of internal infrastructure at a time China grows by building up its own internal market.

Please look up:

www.tomdispatch.com/post/175845/tomgram%3A_pepe_escobar%2C_who%27s_pivoting_where_in_eurasia/

Nevertheless, we must also remark here that Pepe Escobar has not looked yet at the new India as it might evolve under the Narendra D. Modi Administration, and a possible US attempt to try some new alignment with the largest democracy in the world as its way of re-entering the large mass of people economics needed to have weight in a world of consumers. We must also note that in order to reenter the global market, the US must have again also exportable consumer goods besides the present military exports – the latter also by now not being left as a US global monopoly.  Much of the decreased US need for oil imports being not just because of increases in energy efficiency and increases in alternate sources of energy, but as well in the loss of production of goods and employment of its people.

 

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