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After the first Gulf War, the attempted embargo on oil from Iraq led to a limited market in which oil was priced in Euros. That was bad for the US. An attempt

After the first Gulf War, the attempted embargo on oil from Iraq led to a limited market in which oil was priced in Euros. That was bad for the US. An attempt to cut China off from the USD international payments system will lead to a parallel system denominated in some other currency, possibly Remnimbi. That will be bad for the US too. Not for nothing they call Afghanistan the Graveyard of Empires.

onepointsixC 6y ago
The Chinese cannot lead with a RMB system which maintains the capital controls which they currently enforce. For an RMB system to take hold it needs to be freely exchangeable, and that would lead to trillions in additional capital flight from China. A complete non starter for the CCP. The fact is that the dollar is king. Even the BRI, which many describe as China's master plan to influence the world, are denoted in Dollars.
- president 6y ago
  Correct, this is why it is reported that China and other nations like Iran are trying to create an alternative currency to sidestep dollar restrictions.
  - bassman9000 6y ago
    And they won't succeed, because currency is about trust, and dictatorships can't generate any of it long term.
  - onepointsixC 6y ago
    And that won't much more useful to them than the RMB. The Saudi's, whom supply a significant percentage of China's oil, don't want RMB nor some new currency which has the Iranians involved. The Saudi's don't buy as much from China as China buys from them. So they don't want to be stuck with billions of a currency they can't use for anything. But dollars? They can use to that to buy whatever they want from whomever they want. That's because USD is used one one side 88% of all FX trades[1]. If you were going to buy something from another country you already were going to use dollars. [1]: https://stats.bis.org/statx/srs/table/d11.3 https://stats.bis.org/statx/srs/table/d11.3
xref 6y ago
The gulf war was 1990-91 and the euro was created in 1995-99

onepointsixC 6y ago

The Chinese cannot lead with a RMB system which maintains the capital controls which they currently enforce. For an RMB system to take hold it needs to be freely exchangeable, and that would lead to trillions in additional capital flight from China. A complete non starter for the CCP. The fact is that the dollar is king. Even the BRI, which many describe as China's master plan to influence the world, are denoted in Dollars.

president 6y ago
Correct, this is why it is reported that China and other nations like Iran are trying to create an alternative currency to sidestep dollar restrictions.
- bassman9000 6y ago
  And they won't succeed, because currency is about trust, and dictatorships can't generate any of it long term.
- onepointsixC 6y ago
  And that won't much more useful to them than the RMB. The Saudi's, whom supply a significant percentage of China's oil, don't want RMB nor some new currency which has the Iranians involved. The Saudi's don't buy as much from China as China buys from them. So they don't want to be stuck with billions of a currency they can't use for anything. But dollars? They can use to that to buy whatever they want from whomever they want. That's because USD is used one one side 88% of all FX trades[1]. If you were going to buy something from another country you already were going to use dollars. [1]: https://stats.bis.org/statx/srs/table/d11.3 https://stats.bis.org/statx/srs/table/d11.3

xref 6y ago

The gulf war was 1990-91 and the euro was created in 1995-99