The Petro-Dollar is Close to Its End

• The Petro-Dollar is Close to Its End
  by Finian Cunningham, http://tapnewswire.com/, 8 July 2017
  China and Russia have already ditched the US dollar in their vast energy trade. Now China is leveraging Saudi Arabia to also abandon the greenback for oil sales. No wonder, it seems, that US policies are increasingly lashing out.
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  US global power depends on its presumed economic prowess and military force. With its economy in long-term decline, precipitated by the teetering dollar, the US rulers are relying increasingly on militarism to project power. That tendency is pushing the world to war.
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  The challenge is to somehow steer the American military monster into a safe berth without eliciting a world war.
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  The US decline is of historic proportions – on par with the demise of other past empires – and it stems from the looming collapse of the petrodollar system, which has given the US unprecedented privileges over the past decades since the Second World War.
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  It is no coincidence that a surge in global tensions over recent years comes at a time when the American economy is staring into an abyss. The key to the survival of the US economy as we know it is the status of the American dollar as the world’s top reserve currency.
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  The so-called petrodollar system, in which the world’s most traded commodity oil and gas are conducted primarily through American currency, appears to be coming to an end. That decades-old system is being challenged by the rise of China, Russia, India, Iran and others. If the petrodollar and its global privileges are displaced then the United States is facing an economic apocalypse.
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  It should be said that there is nothing illegitimate about challenging this American unipolar dominance. Why should countries be forced to conduct their international trade primarily with the US dollar owing simply to historical circumstances during the 1970s that gave rise to the petrodollar system? That system works, in effect, like a global tax that the US imposes on all other nations because they are compelled to purchase American-printed banknotes.
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  Perhaps no two other countries have done more to forge a multipolar global order than China and Russia. China is the biggest oil importer and Russia is the world’s biggest fuel exporter. When they announced last year that oil trade would be henceforth conducted in their own national currencies of yuan and rouble that development marked a nail in the dollar’s coffin.
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  Now, only a few weeks ago, China and Saudi Arabia – the world’s second-biggest oil producer – reportedlylaunched earnest negotiations for future energy fuel trade to be conducted in yuan. Commentators say Saudi Arabia has little choice in the matter, since China has been progressively reducing the kingdom’s market share with other oil exporters, like Russia and Iran. If the Saudis want to maintain exports to the world’s biggest economy, then they will have to do their business in Chinese currency, not the US dollar as they have customarily done.
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  Randy Martin, an American political analyst, said the long-anticipated decline in the petrodollar is picking up pace.
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  “The petrodollar is in decline, and consequently the entire financial system that undergirds the western economies,” Martin said. “China and Russia have laid the global economic foundation for the new ‘Silk Road’ and the emergence of a new Eurasian economy that puts the US and its petrodollar on the outside. That leaves the US dollar and its economy in tatters as long as the US insists on trying to maintain its unipolar quest for global economic dominance. To be clear, what China and Russia have successfully done is to unravel the economic foundation of US global hegemony.”
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