Shulou(Shulou.com)11/24 Report--

This article comes from the official account of Wechat: Earth knowledge Bureau (ID:diqiuzhishiju), author: thornless Wang Guanlong revised manuscript: Chao Qian / Editor: fruit, Chestnut

There are two old Chinese sayings: fengshui turns around. Thirty years east of the river, thirty years west of the river. Developed countries in Europe and the United States have been very anxious to get angry recently. First of all, the explosion of the Nord Stream pipeline has not yet been identified, followed by the breakage of the submarine cable in Norway, and now there is a new situation in oil.

On October 5, the 33rd OPEC and non-OPEC Ministerial Conference decided to reduce total crude oil production by 2 million barrels per day from November. This is equivalent to about 2% of global oil demand and the largest reduction in world oil production in the past two years. In the days after the announcement, international oil prices rose by more than 10%. The move caused an uproar around the world.

OPEC is at loggerheads with the United States, the Organization of Petroleum Exporting countries (OPEC) currently has 13 members: Algeria, Angola, Equatorial Guinea Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Republic of Congo, Saudi Arabia, United Arab Emirates and Venezuela. Among them, Saudi Arabia is the leader of OPEC.

Except for the Venezuela OPEC countries in South America, ▼ is mainly distributed in Africa and the Middle East.

The crude oil output of OPEC members accounts for about 40% of the world's crude oil output, its oil exports account for 60% of the total international oil trade, and account for more than 80% of the world's proven oil reserves. It plays an important role in the global oil market.

If the OPEC country moves, the global oil industry will shake three times ▼.

OPEC + also includes 10 countries: Russia, Malaysia, Azerbaijan, Mexico, Bahrain, Oman, Brunei, South Sudan, Kazakhstan and Sudan.

OPEC + is also some oil-rich countries, the global crude oil supply is almost up to them (horizontal screen view) ▼

It is the interest that will enable Saudi Arabia and Russia to join hands to organize such a large organization to pass the resolution. The underlying logic is simple: the higher the oil price, the more profitable these oil-producing countries will be.

After the conflict between Russia and Ukraine, the international oil price reached as high as 120 US dollars per barrel. After tasting the benefits of high oil prices, it is naturally difficult to accept the request of the United States to increase production and lower oil prices, so oil-producing countries are willing to join hands to reduce production and push up oil prices.

After this conflict between Russia and Ukraine, who made the money? I don't talk about ▼.

On the other hand, the Federal Reserve has been raising interest rates and shrinking tables in the past year, and a large number of US dollars have returned to the mainland, causing a global shortage of US dollars. As a result, the economies of most countries are in recession, directly leading to a contraction in production and consumption, indirectly reducing the demand for oil, leading to a drop in oil prices.

Most members of OPEC + are not as rich as the gulf states of the Middle East, and oil exports account for most of the country's GDP. Under the balance of various interests, oil-producing countries are unwilling to make sacrifices to increase production and reduce oil prices for the Fed's interest rate increase and contraction schedule, and have no choice but to reduce production and insure prices in order to protect themselves.

For example, the United Arab Emirates, the majority of exports are oil, followed by gold and diamonds do not care about the ups and downs (photo: OEC) ▼

The relationship between OPEC + and the United States is getting closer and closer to the level of tension. The gas shortage in Europe this winter has already wreaked havoc on the entire European Union, and oil prices are adding fuel to the flames.

The situation in the United States is no less than that in the United States. stubbornly high inflation has led to high prices, and the rise in oil prices is even more likely to rain overnight. So over the past year, the United States has been asking OPEC + to increase production in order to lower oil prices.

But Saudi Arabia, the leader of the OPEC, repeatedly refused to take calls from the United States, leading Biden to visit Saudi Arabia in July to discuss energy production, which increased crude oil production by 100000 barrels a day in September. But these 100000 barrels are a drop in the bucket, the smallest increase in OPEC + history.

The United States worked hard for a whole year, only to be stabbed in the back by my younger brother Saudi Arabia. Biden expressed disappointment after OPEC + announced production cuts.

The White House also issued a statement saying that the U.S. Department of Energy will continue to implement the strategic oil reserve release plan of 180 million barrels, announcing that it will release another 10 million barrels of strategic oil reserves to the market in November when OPEC + begins to cut production. The so-called strategic reserve is the trump card at the bottom of the box, which cannot be easily taken out in peacetime, but can only be used to save lives in case of a hundred thousand emergencies.

The oil reserves that we finally saved up went back to ▼ before liberation.

In order to counteract, the US Senate Committee passed the Anti-Oil production and Export Cartel Act (NOPEC). The United States believes that OPEC does not care about high-priced oil, and is mainly committed to good relations with Russia, a major member of OPEC +.

The United States is in the vanguard of saying "NO" to OPEC (photo: youtube) ▼

Market analysis, affected by the OPEC + production reduction, the NOPEC bill may be put back on the agenda. Once the bill takes effect, the United States will have the right to sue those oil-producing countries for monopolizing and manipulating the market in federal court, demanding compensation from oil-producing countries.

Dollar hegemony, how to establish the United States can be said to be the largest hegemonic country on earth today. The cornerstone of American hegemony is to reap the wealth of the world by relying on the binding of the US dollar and oil. We will explain it clearly in the most easy to understand language.

It is well known that the Bretton Woods Conference of 1944 pegged the dollar to gold. 35 US dollars = 1 ounce of gold, establishing a world monetary system centered on US dollars.

What does this mean? That is, in the future, everyone will use US dollars to do business. Why use dollars? Because at that time, the United States had 2/3 of the world's gold reserves, which is why the US dollar was also called "US dollar". People did not necessarily go shopping with gold every day.

At the same time, it is impossible for people to use the junk money of third world countries. For example, if you trade with Zimbabwean dollars, you sell a roll of toilet paper to others today and receive 5000 Zimbabwe dollars from the buyer. As a result, because of political instability and currency depreciation tomorrow, a roll of toilet paper rose to 5 million overnight. When I woke up, the money in my hand was inexplicably devalued by 1000 times.

Because of the monetary stability of the dollar linked to gold, everyone decided to use the dollar, and for every $35 issued by the Federal Reserve, it was necessary to increase its real gold reserves by one ounce.

So there is a real question: if you are given the right to print money, can you control it from playing tricks behind your back? The United States is no exception, starting to overprint money. As soon as money is printed in the United States, the assets in other people's hands depreciate wildly. So many people began to sell dollars and exchange them for gold.

What will the United States do at this time? Being naughty, of course. So in 1971, the United States announced that "the dollar was decoupled from gold." At this time, the Federal Reserve printing dollars, there is no need to consider the amount of gold reserves behind, by the way, the SWIFT system was also established that year.

As a result, the credibility of the dollar has declined. However, after all, the skinny camel is bigger than a horse, and it is still better than other currencies. People don't really do business with Zimbabwean dollars.

Two years later, in 1973, Kissinger, the then US secretary of state, lobbied Saudi Arabia, the boss of the OPEC, to settle oil in US dollars. If not, Saudi Arabia will face the same situation as Iran.

In 1953, the CIA orchestrated a color revolution against Iran, when Mohammad Mossaday, then prime minister of Iran, was overthrown. Thinking of the end of Mossa, the Saudi royal family, under both coercion and inducement from the United States, agreed to price and settle oil in dollars around the world.

Under the agreement, Saudi Arabia must use the surplus dollars to buy U.S. Treasuries. At the same time, Saudi Arabia is also responsible for lobbying other OPEC members to price and settle oil in dollars. Since then, the dollar has been pegged to oil after it was decoupled from gold.

Oil is a rigid demand, and no country can do without oil. So from then on, the "dollar hegemony" officially appeared on the stage, and the whole world was pulled into its shadow by the dollar.

That is to say, in the past, if you wanted to rob others, you had to rob others by military means. Now, as long as the Fed prints money, it can create artificial inflation to rob the entire planet. Financial nuclear bombs SWIFT and CHIPS can also be used to engage in financial dictatorship against political enemies around the world, thus carrying out global plunder.

And the most powerful thing is that the dollars obtained from settling oil will eventually flow back to the capital markets of the United States, forming a cycle. The United States prints and issues banknotes, and uses dollars to buy goods and services around the world, while countries use earned dollars to buy oil, and oil-producing countries buy US Treasuries after earning US dollars, so the US dollars flow back into the hands of the United States.

With a little finger movement, you can make the world work for the United States (NYSE) ▼.

In this way, at the cost of printing money and the interest rate of treasury bonds, the United States enjoys goods, services and services around the world, forming a worldwide cycle of dollars, and countries around the world hold a large number of dollars and US Treasuries. Countries with weaker national strength cannot bear the financial dictatorship of the United States at all, because it is impossible for them to break away from the dollar.

Today, the petrodollar system has been running for more than half a century, and the United States is greedily absorbing the blood of countries all over the world through this triangular infinite circulation system of "dollar-oil-US debt".

The foundation of petrodollars is shaken. "US hegemony" is based on "US dollar hegemony", while "US dollar hegemony" is based on oil. For half a century, the United States has been robbing and engaging in military and financial dictatorship all over the world.

From World War II to the present, the United States has launched more than a dozen foreign wars and more than 200 armed conflicts, large and small, with hundreds of millions of victims. And when the United States beats others, as long as it dares not to stand in line, it will also be maimed. This is "American hegemony."

If anyone dares to challenge hegemony, the end will be extremely tragic. Just look at what happened to Saddam. Saddam was sent to the gallows because he wanted to unpeg the dollar and use euros to settle oil, and his son and grandson were killed by the US military.

So are the "+" of OPEC + controlled by the "dollar hegemony"? That's for sure. Take Russia, the leading brother, as an example. Although Russia has oil, natural gas and grain, it will eventually have to sell these resources in order to make money, so Russia has always been in this petrodollar system, with the neck pinched in the palm of the hand by the United States.

Russia has oil, but no pricing power, which is very deadly. If Russia disobeys, the United States can bring oil prices down. In order to compete with the United States for pricing power, as early as 2008, Russia set up its own "oil trading platform", "natural gas exchange" and "international commodity raw material exchange" in St. Petersburg, pricing oil and gas exports in rubles. As a result, Russia has the right to set the price of Russian oil and gas exports.

During the Ukraine crisis in 2014, when the West imposed blanket sanctions on Russia and threatened to kick Russia out of the SWIFT system, Russia set up its own payment system and financial information exchange system, laying the financial foundation for de-dollarization.

Over the years, Russia has been playing a big game of chess, determined to break away from the "dollar hegemony", including restricting the use of the dollar, selling US Treasuries, increasing gold reserves, and so on. Especially in the context of escalating Western sanctions in 2018, Russia spared no effort to dollarize.

The effect of Russian de-dollarization is still very significant ▼.

By 2021, Russia had completely emptied the dollars in the state welfare fund and almost completely wiped out the long-term U.S. Treasury bonds.

Two days after the conflict broke out between Russia and Ukraine, without accident, some Russian banks were kicked out of the SWIFT. In the face of Western sanctions, Russia changed hands to make a "list of unfriendly countries", announcing that if these countries want to buy Russian energy, they must settle in rubles.

Russia's de-dollarization this time is equivalent to breaking away from the hand that the United States has grabbed itself by the neck. From then on, the United States could not use its oil pricing power to suppress Russia.

Although the "dollar hegemony" has not been completely subverted, there will be a series of knock-on effects after that, and many countries represented by China are following up and beginning to de-dollarization.

On March 28, Chinese Foreign Minister Wang Yi held close talks with the foreign minister of the United Arab Emirates, and the Arab side said that future oil transactions would be settled in RMB. At the same time, Iran also announced an agreement with China to continue to supply oil to China for the next 25 years, also settled in RMB.

Not only the United Arab Emirates and Iran, but also Russia, Venezuela, Nigeria, Angola, Qatar, Saudi Arabia, Iraq and other oil countries have joined the ranks of RMB transactions.

On April 18, Nabi Ulina, governor of the Russian Central Bank, said that the payment transaction system established by Russia was welcomed and 52 foreign institutions had joined it. On Sept. 6, Russia's energy giant signed an agreement with CNPC to sanction the United States and settle energy in rubles and yuan.

Us Treasuries, the foundation of the petrodollar, are also losing market share. Since the beginning of this year, US debt has fallen by nearly 20%, and 54 countries have continuously sold US debt.

According to data released by Deutsche Bank on July 1, US debt fell by more than 13% in the first half of 2022, the biggest decline since 1788. Major countries, institutions and wealth funds around the world have sold US bonds net in 27 of the past 36 months, with a total sales of $1.15 trillion. It will also greatly shake the foundations of the petrodollar system.

Us debt, will it be all right, ▼?

However, even without external factors such as OPEC + production cuts and other currency settlement of oil, the petrodollar system will eventually be shaken. Once the world realizes the transformation of new energy, the demand for oil will be greatly reduced. At that time, the petrodollar system will naturally collapse.

When will history be rewritten? ▼

Reference:

1. Https://www.ftchinese.com/story/001096369?full=y&archive

2. Https://www.cnfin.com/news-list/index.html?tagname=%E7%9F%B3%E6%B2%B9%E7%BE%8E%E5%85%83

3. Https://xueqiu.com/3384330352/176241839

4. Https://m.sohu.com/a/600273213_120258874/

5. Https://zh.wikipedia.org/wiki/%E6%B2%B9%E5%85%83

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* the content of this article is provided to the author and does not represent the position of the Earth knowledge Bureau

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