The world moving away from trading oil and natural gas in dollars is U.S. fiat currency and debt coming home to roost. From Quoth the Raven at zerohedge.com:
Submitted by QTR’s Fringe Finance
I’ll be the first to admit that two of the main themes on this blog – the United States’ sovereign debt crisis and the deterioration of the petrodollar – have been extraordinarily slow-moving theses.
In both cases, there have been developments that stand at odds with my contentions. For example, US stock indices continue to move higher, despite our economy grinding to a halt, and the BRIC nations have not developed and put forth their own reserve currency to combat the dollar, as I have suggested may happen. They also haven’t backed any of their sovereign currencies with gold, as I have also suggested. While the timing hasn’t proven me right as quickly as I would like, it doesn’t mean that things aren’t ticking forward for both of these forthcoming realities.
And, in the case of the death of the petrodollar, there was a huge development in late November that was under-reported and unnoticed by the market.
The death of the petrodollar is one of the key waypoints in the US dollar losing reserve currency status, as I have written about at length in the past. And while the US dollar used to be the only currency that foreign nations would trade oil in, that has now come to a screeching halt.
Not only is Saudi Arabia trading oil in other currencies than the dollar (notably the Yuan), it now appears the UAE is also strategically shifting away from the US dollar in its oil transactions, marking a significant change in the global financial landscape.
