Rise of the Petroyuan: The End of the Petrodollar’s Reign and the Impact on Global Markets, by Nick Giambruno

That the world’s oil trade was priced in dollars was an enormous boon to both the U.S. and its currency. From Nick Giambruno at internationalman.com:

The Impending Demise of the Petrodollar

Did you know that central banks bought more gold last year than any year in the past 55 years—since 1967?

Though most don’t realize it, 1967 was a significant year in financial history, mainly due to the events at the London Gold Pool.

The London Gold Pool was an agreement among central banks of the United States and Western European countries to stabilize the price of gold. The goal was to maintain the price of gold at $35 per ounce by collectively buying or selling gold as needed.

However, in 1967 the London Gold Pool collapsed due to a shortage of gold and increased demand for the metal. That’s because European central banks bought massive amounts of gold as they began to doubt the US government’s promise to back the dollar to gold at $35/ounce. The buying depleted the London Gold Pool’s reserves and pushed the price of gold higher.

In short, 1967 was the beginning of the end of the Bretton Woods international monetary system that had been in place since the end of World War 2. It ultimately led to severing the US dollar’s last link to gold in 1971. The dollar has been unbacked fiat confetti ever since—though the petrodollar system and coercion have propped it up.

The point is large global gold flows can be a sign that a paradigm shift in the international monetary system is imminent.

Central banks are the biggest players in the gold market. And now that we have just experienced the largest year for central bank gold purchases since 1967, it’s clear to me something big is coming soon.

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