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Yuan vs dollar: the global energy market could soon shake

Юань vs доллар: мировой энергетический рынок может скоро сильно потрясти

In the near future China may start trading futures contracts on crude oil in RMB. The Chinese national currency is pegged to the international price of gold in contrast to the American dollar, which, as a rule, paid oil contracts, according to the respected business newspaper Al Eqtisadiya.

If that happens, it will be the first trial balloon, to be launched in the face while looking in a relatively stable dollar pyramid.

The publication indicates that the move “will have a major impact on oil prices, which can rise to $ 70 per barrel since the beginning of the implementation of these contracts. He will also have an impact on the world price of gold, which will rise to $ 1850 per ounce instead of today’s $ 1,350”.

It is obvious that the greatest interest this future is for those countries in respect of which the US is waging an aggressive foreign policy: for example, Venezuela, Iran, Qatar and many others, including Russia.

“The possible impact of China purchasing oil in the yuan, backed by gold, is the weakening of the dollar against major currencies. But it can have a positive impact on increasing U.S. exports and reducing imports, thereby decreasing the trade deficit in the U.S.,” says economic adviser and managing investment funds Ammar al-Mufti, whose opinion can happen radical change in the rules of the global economy and the U.S. dollar will get a telling impact as a result of reduced it investment attractiveness, Bank interest rates in USA will rise. It turns out that this is a direct undermining all the apparent prosperity of the United States, which by and large is based including on the “big milking” the rest of the world.

Negatively it can affect the state, and private lending in the United States. Under attack, again, can be few sectors of the American economy, for example the services sector, said al-Mufti.

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“Public or private sector in the U.S. will have to reduce consumption and increase investments, which generally is a favorable factor for the U.S. economy in the long term but in the short and medium term, the consequences can be very negative. Especially given the fact that the beginning of the implementation of contracts (which is going to introduce China — ed.) coincided with the beginning of the era of the restructuring of the American and world economy and the beginning of the era of precious metals,” said al-Mufti.

As Dr. Mohammed al-Khalidi that specializiruetsya on the issues related to the gold trade, the price of oil since the beginning of the implementation of contracts could rise to $ 70 per barrel, which will lead to a rise in gold prices, which “fly” above $ 1850 per ounce.

Successful implementation of the Chinese futures contracts may affect the investment policy of banks and the behavior of investors, which ultimately will lead to the weakening of the dollar. And this has a positive effect on prices on international shipping, imports petroleum products and other goods. Also, it may decrease the size of the budget deficit in countries in the medium term to an acceptable level.

In the future, the Chinese futures, which will be based in Asia, may be the new benchmark for traders, which is used to operate the us dollar in payments for oil deliveries. Or become a kind of alternative to the calculations, which is also important, since it greatly weakens the arm of American dominance in all spheres of the economy.

What is the benefit for Russia?

Actually quite obvious, as oil exporters such as Russia and Iran, will be able to avoid using the dollar, when you need to circumvent sanctions. Another plus on the stock exchanges of Hong Kong and Shanghai will be possible to convert the yuan into gold. And this will be another incentive to shift trade to Asia, say experts of the Agency Nikkei.

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So, the rules of the game in the global energy market are likely to change gradually. Moreover, it can happen faster than predicted by many analysts, after all, in China, which has long wanted to reduce the dominance of the us dollar in the commodities markets, has already developed the necessary infrastructure to launch a new futures contract for crude oil will be in demand.

Earlier, in the spring of last year, was launched the futures in yuan for gold, they are traded on the Shanghai Gold Ex. Currently, the exchange plans to launch trading on the stock exchange in Budapest.

If they successfully operate two contracts – crude oil and gold are denominated in RMB, then it will allow the bidders to pay for oil in gold or to convert yuan into gold without resorting to calculations in dollars. So, if the trader does not want to pay in RMB, he can use gold.

As for Russia, then it benefit of these calculations is obvious: Russia, for example, will be able to sell the “black gold” to China, then converting the yuan into gold. Thus Russia will not have any obligation to keep money in Chinese assets, or to transfer revenues from oil sales in the unsecured green with portraits of American presidents.

In turn, China is trying to push his initiative, has also put pressure on exporters, threatening them with reduction of their share in the market, if they don’t want to draw attention to the new Chinese futures.

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