Sunday, January 18, 2015

Demise of the Petrodollar and the End of American Power

Oil price fall down as result to preasure Russian not to demise Petrodollar or it`s because some country already make an action diminish their dependence on the dollar as financial and geopolitical order ?

BRICS countries — Brazil, Russia, India, China and South Africa, a bloc of the world’s five major emerging economies — have long sought to diminish their dependence on the dollar as a means of reshaping the world financial and geopolitical order. In the absence of a viable alternative, however, replacing it has proved difficult.

For its part, “China sees the dominance of the dollar in international trade transactions as a remnant of American global dominance, which they hope to overthrow in the years ahead,” said Michael Klare, a professor of  peace and world security studies at Hampshire College. “This is a small  step in that direction, to reduce the primacy of the dollar in  international trade.”

Russian cut a landmark deal to build pipelines and sell natural gas to China for the next 30 years. This fills Russia’s coffers, but more important, not a dime will transacted in US dollars. This is a direct threat to the current petrodollar system, in which the majority of the energy trade is priced in US dollars and sold in dollars.

Along with China, Putin delivered another crushing blow to the US dollar with the New Development Bank, which will make large strategic investments in developing nations in Africa, Latin America, and Asia through a non-dollar international payment clearing system.

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