The latest trade figures on Chinese/Russian trade should be further warning to the U.S. that economic sanctions do not work. In May 2017 Russian and China agreed to increase bilateral trade to $80 billion by the end of 2018.
Well, they’re a year ahead of schedule...
The official figures for 2017 came in at $84.07 billion.
They did more than $8.1 billion in business in December alone. With the opening of the new ESPO oil pipeline connecting Siberia to China doubling the amount of oil China can import to 600,000 barrels per day we’ll see those numbers continue to accelerate.
And that’s the key. Remember, the massive $400 billion gas deal China made with Gazprom in 2014 hasn’t begun delivering gas. The first Power of Siberia pipeline isn’t due to be completed until 2019. The second Power of Siberia pipeline is on the table after this one.
And the two countries just agreed to a third pipeline to bring gas in from Russia’s far east last month.
So, despite back-biting from western media about the profitability of these projects, they are going forward and the two countries continue to strengthen fundamental ties to one another.
Greasing the Skids
We are now just a week away from trading yuan-denominated oil futures on the Shanghai International Energy Exchange(INE). Trading begins January 18th.
And while that won’t change the face of oil futures overnight, it will begin shifting price discovery away from U.S. dollar markets. It will also improve external yuan liquidity as well as visibility for Russian oil on the global market.
The Shanghai contract is for Medium Sour crude which is closer to the type of oil mainly produced by Russia. Russian Urals crude is considered Medium Sour. Saudi Arabia’s and most of OPEC is sour oil (higher in sulfur with a lower pH). With the OPEC production cuts which Russia agreed to emulate, mostly hit this market.
Both WTI and Brent crude are benchmarks for Light Sweet Crude like that of the U.S. shale producers, Venezuela, Nigeria and Libya. So, this contract is designed to properly price other grades of oil not tailored to U.S. refinery needs.
And for that reason alone it will be a major competitor in the long run. The current oil market is heavily fragmented because there is no direct futures market for Sour grades of crude.
Shanghai’s contract is changing that game. Between this and that profits from it can be converted to gold via the Shanghai Gold Exchange, gives this market immediate credibility.
The effects of this have been over-stated on the one hand by hard-money advocates and under-stated on the other by entrenched financial analysts.
The important takeaway is that China has created the first unassailable and above-ground challenge to the petro-dollar oil trade. To break the world’s use of the dollar as the sole settlement currency for oil required the right contract issued by a country the U.S. can’t immediately invade and conduct a regime change operation in – like in Iraq and Libya.
Russia wins here because now there is a path for its Urals grade to become an international benchmark like WTI and Brent. And since Gazprom prefers to price its long-term gas contracts based on underlying oil prices rather than the more volatile natural gas price, this is also a win in the long run for them.
Gold convertibility is a means to deepen China’s sovereign debt markets by making it less risky to hold Chinese bonds. The lack of true yuan convertibility is the big impediment to people holding them. So, gold convertibility creates a viable exit route.
A Means to an End
Increasing trade between Russia and China has to and will go far beyond energy for its partnership to thrive. The oil trade is simply a means to building the underlying capital flow between the two countries. It makes it easier for Russian businesses to get access to Chinese capital and vice versa.
And this rapid acceleration of bilateral trade is necessary in the face of more severe U.S. economic sanctions against Russia likely coming next month. The way to avoid sanctions is to build alternate means to do business.
We will continue to target Russian banks and financial oligarchs with the idea of curtailing economic growth by cutting out their ability to source overseas capital. And again, this is why China is so important to Russia.
Because the more we push them away the more they can turn to their Chinese partners for assistance and the U.S. doesn’t dare sanction China, no matter how much President Trump bloviates about it.
China announced last week that it would not longer be accumulating U.S. treasury assets. Presumably, this mean that it will no longer recycle its trade surplus with the U.S. to halt appreciation of the Yuan versus the dollar. [ZH: of course this was denied within 24hrs but the threat remains]
It’s had to over the past year with the dollar weakening like it has. But that wave is coming to an end with a reversal of Fed policy and Trump’s tax cut bill. Rising rates in the U.S. will allow China to divest its Treasury holdings at its leisure without overly affecting the Yuan while it also deepens Yuan liquidity through its now gold-convertible bond market.
Those trade dollars will be spent in pursuit of China’s One Belt, One Road initiative and overseas where it has business. I’m sure if Russia gets into another dollar-funding crisis with new sanctions China will be there to provide dollar liquidity, just like in 2015.
Both countries understand the stakes and continue to make the right moves to support the changing macroeconomic environment. With U.S. bonds on the verge of entering a bear market conditions are ripe for China to deploy its massive savings to resume remaking the Asian continent.
Comments
Ah the party's finally started...lets see what the guests are wearing - and what presents they've brought...should be a cracker!
Musical chairs offered only to those who saved diligently their gold sovereigns...
18.1.2018 = 18+1+11=30
30 = Jupiter = Zeus = X = Lucifer = (G)
The three points of light.
The pyramid completed.
The Barcids should be proud.
For the PhoeniX is a royal PURPLE bird.
That will sit on the pyramid's capstone, the benben.
Things never are the way they seem.
Theirs has been a Herculean task.
Meet your hidden superior.
Not mine.
In reply to Ah the party's finally… by Crazy Or Not
A weaker, less desirable dollar means ... higher commodity prices.
Higher everything prices, in fact. What a weird dilemma.
At some point it means get rid of your dollars, but do not buy US stocks.
This Russia/China alliance is some frightening news.
In reply to Musical chairs offered only… by peddling-fiction
Time to pay back the debt accumulated for 43 years of exorbitant privilege. The day of reckoning is never fun.
In reply to A weaker, less desirable… by directaction
In addition, Putin's been MAD at the American Empire for a long time.
https://bipworldview.wordpress.com/2018/01/10/putin-and-the-american-em…
So shooting down the petrodollar will be sweet revenge.
In reply to Time to pay back the debt… by YUNOSELL
"The day of reckoning is never fun". Especially when you happen to live in shitplaces such as Detroit, Baltimore or West Philly or in areas that can be reached within a 1-day trip from any of those envy-of-world oases of liberal prosperity.
In reply to Time to pay back the debt… by YUNOSELL
Wait. Doesn't lower dollar mean a boost to industrial exports and increased jobs?
Bwhahaa
(Too bad we moved the factories to China and don't have a non-war machine industrial base anymore. )
In reply to A weaker, less desirable… by directaction
Few factories means no war-time alternate production.
You boys been (((had))).
In reply to Wait. Doesn't lower dollar… by BlindMonkey
plus a strip mined economy and debt burdened populace means little to no domestic demand
In reply to Few factories means no war… by peddling-fiction
We can do it but the current MIC would have to work 'round the clock to keep us safe and all.
In reply to Few factories means no war… by peddling-fiction
Maybe they can re-tool the war machine factories to make cheap plastic shit...
In reply to Wait. Doesn't lower dollar… by BlindMonkey
I like where you're head is at.
In reply to Maybe they can re-tool the… by yellowsub
I like the artwork accompanying the article. It captures the situation nicely.
In reply to I like where you're head is… by BlindMonkey
Higher prices is called inflation. This is just what the CB's have been trying to create over the last decade. Why so gloomy now?
It's amazing what amicable partnerships can do for the countries. OBOR will drive the Asian economies for years, while merica stagnates in a high inflationary environment. With that much debt Trumpy cut taxes to the corporatocracy, not the the people that buy from them. Less income tax means moar debt to keep USS Titanic full steam ahead. I see DiCaprio on the bow!!!
In reply to A weaker, less desirable… by directaction
The Russia/China alliance was cemented through the 2014 sanctions. I remember it well that they had negotiated about that gas pipeline but when Obama slapped those sanctions on them in 2014, Moscow saw the writing on the wall and made price concessions to get it going. What luck for the Chinese that Russia needed to have that contract.
Quite a normal thing: Kick people out the tent, and you will discover there are so many outside that you inside the tent are now the outsider. But America does not grasp that. They are addicted to punishing others when they don't obey. The drop of Dollar value has been going on for a few years, but it is a very slow development.
In reply to A weaker, less desirable… by directaction
Guys and Ladies, this seems so obvious that it means that it is PURPOSEFUL.
In reply to The Russia/China alliance… by uhland62
18th is a launch (code-x) ..the fruition like vin nègre will spent time maturing. I warrant you the eclipses of 2024, 2026 and especially August 2027 will hail Craterellus cornucopioides and burn lighted fuse to trigger over their following days and weeks. My only superior is of my own self, and we discuss with frequency. True there are difficult times close by and a purging of sorts/souls. Real freedom is not here til for now, or even 7 realms up, true freedom is a stellar journey, I'm sure you've labored for that odyssey?
http://www.ianridpath.com/startales/hercules.htm
In reply to Musical chairs offered only… by peddling-fiction
A big harvest of souls is at hand.
The biggest ever. X marks the spot.
Yes, the inner spirit becomes available to few people.
I will be leaving as soon as my mission is over.
And I will not be coming back.
In reply to 18th is a launch (code-x) … by Crazy Or Not
if you knew anything about numerology, you'd know 30 has absolutely no meaning at all...
let me enlighten you... 1 through 9 is all you need, though 11 and 22 are considered 'master' numbers which intensifies 2 and 4
amateurs heh ;-)
ps. lucifer (satan) has a connection with saturn, not jupiter pfft
In reply to Musical chairs offered only… by peddling-fiction
Lucifer is to the Moon
As Satan is to Saturn.
In reply to if you knew anything about… by fel.temp.reparatio
Everytime I see a post of some delusional "arcane" or "occult" "theorist" or imbecile I have to laugh. All of that numerology and symbology is BS it is just some idiot thinking he has "magical" powers or understands "magic". There is no such thing. Thelema, rs, and all "arcane" / "occult" BS is pure idiocy, JUst a bunch of morons full of hubris thinking they hold some special knowledge reserved to few (which of course can be thoroghly found on the internet), but are just boring as hell.
In reply to Musical chairs offered only… by peddling-fiction
Total nonsense. For one China is not going to allow the new futures contract to be convertible to gold or even to allow the yuan to be convertible. China has also denied all of of this. China has capital controls and that includes gold and does not allow it to be moved outside it borders. If you actually read the terms and conditions of trading the new contract there is nothing on the official website allowing this. Folks it is all fake news. This would in fact strengthen the yuan and collapse their exports and then their economy. They also realize that the US could convert the stronger dollar to the weaker yuan and drain gold reserves. China is not stupid. Now with this fake news why would anyone buy gold in a country if you cannot remove it?
In fact the new futures contract will have no effect on the dollar. Chinese oil firms will use Chinese banks with trading desks to buy hedges using put options in case prices fall. To get speculators in the terms state that foreign currencies can be used to satisfy margin requirements.
The petrodollar has become meaningless in the Middle East. The whole purpose was to flood the international system with dollars and treasuries and this was firmly accomplished decades ago. People just do not realize that countries do not like to hold large amounts of foreign currencies as these pay no interest and are forced to buy treasuries as this is the second most liquid market on the planet behind currencies. China is at least 10 years away from having a large and liquid enough bond market to compete. Europe has no federalized bonds backed by all member countries so that leaves treasuries as the only game in town. What else is there to buy? Italian and Spanish sovereign debt? Not a chance in hell!
The net has become full of this nonsense where people read crap and simply repeat it. They fail to think critically or do any meaningful research. They are either totally clueless and/or are part of the pump and dump scheme that the net is full of.
In reply to Ah the party's finally… by Crazy Or Not
Boring.
In reply to Ah the party's finally… by Crazy Or Not
"Murica=Shithole
Stay Tuned.....
Notice how major developments in Russia always seem to be achieved / completed ahead of schedule (unlike the West, where missed schedules are the norm). The major 22km long bridge linking Russia with Crimea is but one recent example.
The West overstates (and overestimates) their capability, Russia prefers to continue to give "us" nasty little surprises where capability is concerned.
https://sputniknews.com/us/201510111028354019/
In reply to "Murica=Shithole… by RawPawg
Resolve, loyalty and need.
In reply to Notice how major… by Parrotile
$84 billion trade between China and Russia is pathetic. The Chinese annual trade surplus with the USA is $400 billion, that's over $2 trillion in five years and is growing at a faster rate than the $84 billion China/Russia trade.
How is this small insignificant trade going to damage the US?
If China makes the mistake of a regional war with India, Taiwan and the countries of the South China sea, then the Chinese lose 18% of their export economy. The US would shut the trade off. If China loses 18% of it's global market, then the Chinese mercantile economy would contract, there would be no market to replace the US market.
China is deeply in debt and must grow at a rapid rate to service debt, both domestic and foreign debt. And China's debt is exponentially higher than it's reserves. Most economist clock Chinese debt between $20 trillion to $30 trillion, however, the state owned sector is excluded from all reporting. I've assessed $30 trillion to $40 trillion total Chinese private, state and state owned sector debt, because of excesses in the state owned sector.
The left wing media propaganda, the China apologist, the corporate lobby, all work for China, not America. The Chinese don't report accurate numbers and if something is bad or risk, they'll cover it up. The state owned sector is the greatest drag on China and there is no way to end the state owned sector.
A collapse of the Chinese economy means war for everybody because the CCP Chinese Communist Party must distract the masses from economic failure and starvation with war. India is a primary target, Taiwan invasion is a CCP political plank, the South China Sea claim is based on mystical spiritualism - Chinese ancestor worship and the potential hydrocarbon production. China's mercantile empire building economy must secure energy resources, because hydrocarbons and raw materials imports are essential for maintaining the drive for economic control of the world. It's a repeat of Great Britain's mercantile economic empire.
In conclusion I'm predicting a trade war followed by real war. This is why we're seeing a wide range of targets for China's war machine, it will be a move to appease the masses by blaming a foreign country for China's failure. Also, China has made it their official policy to drive the Americans out of Asia.
Once the Chinese lose of it's 18% US market and US investment in China ceases, expect 300 million Chinese will starve to death, Xi alluded to this reality because he lived it. The main reason China's population has expanded dramatically was because trade provided a better and continuous diet. When one leg of the Chinese giant collapses, watch as it all unravels and war is heard around the world.
In reply to "Murica=Shithole… by RawPawg
You must mean more trade war. Right knuks?
In reply to $84 billion trade between… by MK ULTRA Alpha
How's your brain after the CIA used microwaves to control your mind?
In reply to You must mean more trade war… by peddling-fiction
What's it like being a strawman for the CeeIgAy?
Is it not wonderful seeing independent yet assertive people posting freely?
You are rotting inside, body, mind and spirit, waiting for assured damnation.
Dead meatbag walking...
In reply to How's your brain after the… by MK ULTRA Alpha
And that... ladies and hermaphrodites... is a chilling inside look, at what happens to a mind absorbed into the talmudic kabbalist borg, damaged beyond all repair...
and then spit back out to revolve... like a spinning top... in endless gyrations of insane palaver, in the style beloved of the 'new' internet medias... and the slack jawed mindcontrol victims who luv it!
In reply to What is it like being a… by peddling-fiction
Bob-bay the disturbed Canadien.
How are your art scene and literary covers progressing?
Lennon was not a prophet.
He died a philosophical "death", like many of you " illuminated" and "knighted" company men do.
I am not doxxing you yet, but push me a little and I will.
Merci
In reply to And that... ladies and… by BobEore
maybe we should look beyond the numbers and also consider real global inflation. Surplus is a worthless IOU. china runs surplus because there are no goods worth the exchange. surplus is not necessarily good news, its a liability that comes with the risk higher than internal debt imo.
I think china desires inputs that drive their growth more than American fiat. If they can get these inputs running a parallel fiat system they can kiss dollar goodbye, but first they have to dump dollar assets without shooting themselves in the knee while doing it. wont happen overnight.
the truth is, there is not much that US economy can offer in exchange for Chinese good other than global IOUS or hand over some of its global turf.
In reply to $84 billion trade between… by MK ULTRA Alpha
$84 billion trade between China and Russia is pathetic. The Chinese annual trade surplus with the USA is $400 billion
To me that's bad news for merica. Lack of diversification for supplies and goods. Bad management. Those US corporations operating out of China have given a lot of jobs to the Chinese people and they are shopping merica. China nor Russia rely on one market or put too many eggs in one basket.
Merica had the opportunity to participate in OBOR but showed no interest. Merica could have taken the opportunity to participate and get some jobs out of it. But thats not the empire's project so they thumb their nose at it. The merican public lost out big time.
Merica rapes and pillages other countries to survive.
In reply to $84 billion trade between… by MK ULTRA Alpha
In a classic case of 'blame the victim'...
the rape n pillage of America and the rest o the western satrapies of the $power, by talmudic kabbalism in the form of international finance capital... and then its further Golemization into a lumbering enforcer of that same cabals writ...
gets played back to us by the ragin loons of the 'alt-0-right' mediasphere as
It's not too late to turn off the mindcontrol machine in front of your eyes... n come back down to earth son. But times a runnin out!
In reply to $84 billion trade between… by Justin Case
Guy said you can now press F3 on the keyboard if you didnt want to answer a question asked by the gvt. I said cool
In reply to In a classic case of 'blame… by BobEore
Consider this: if it comes down to choosing between 300 million Chinese peasants starving, or sending them to the US as an organized and armed immigration tsunami, what do you think the CCP will choose?
In reply to $84 billion trade between… by MK ULTRA Alpha
The key point was that the figure was reached a year earlier than predicted, or did you miss that one?
In reply to $84 billion trade between… by MK ULTRA Alpha
Need more doom!
The author has been accused of fake science in articles on man made Climate Change. He has a BS in chemistry from University of Florida, a third rate party school for red necks in Florida.
His thesis is the US should/must worry about $84 billion China/Russia trade and he uses as evidence a brief (copied from someone's publication) economic analysis on the Russian hydrocarbon industry, all of which has been reported in the media.
The $84 billion trade is insignificant in the grand ocean of global trade even the global hydrocarbon trade, the trade number would have to be a trillion or more to have any meaning, especially the meaning this author is trying to slant into the minds of his fellow Americans. He is a typical brainwashed anti-American communist, programmed to destroy America not realizing he was in fact brainwashed by a communist media and education system to destroy America.
In reply to Need more doom! by MozartIII
I appreciate the artwork - would love to know the painter.
at my work, the office network uses chrome
if you right click on an image in chrome, the menu includes "search google for image" or some such; that might be an option toward finding the artist
In reply to I appreciate the artwork -… by Blue Vervain
The author is Egor Motygin: https://www.deviantart.com/art/G20-summit-450311840
In reply to I appreciate the artwork -… by Blue Vervain
this is the biggest story of 2018. remember the dollar devaluation will be reflected in a soaring nominal price for equities and other hard assets like real estate and gold.
lets not forget fuel, food, elec, etc. It's going to hit hard and nobody in charge has a fucking desire to fix anything.
In reply to this is the biggest story of… by besnook
China, playin' the long game... 'Murica settles for instant grits!
"Don't need no stinking USDs, gringos!"
Back to Gold currency...
In face of fake dollar...
A great picture... facing that monstrous financial cancer.
+
An interesting approach to Trump foreign policy, which push in the same direction. I mean against that rotten beast of fake dollar hegemony
https://www.strategic-culture.org/news/2018/01/02/trump-cuts-gordian-kn…
We are truly walking into rough time.
Back to Gold currency....? The effects are being overstated by gold bugs:
Shanghai’s contract is changing that game. Between this and that profits from it can be converted to gold via the Shanghai Gold Exchange, gives this market immediate credibility.
The effects of this have been over-stated on the one hand by hard-money advocates and under-stated on
Chinese and Russian bonds, along with future contracts will be denominated in national units. The option to exit to gold is available. In no way is this a gold currency. Gold remains as commodity and will have a price.
The fake dollar is fake because it is created by private banking corporations, at interest.
In reply to … by Stef1304
Unknown to hyper-ventilatin hookah pipe addicts who don't read the small print of any news story...
the "contracts" issued by the fabled PANDAVILLE exchange allow for the VERY SAME derivatives and cash settlements as their "partner" exchanges in the west world do...
which kinda, sorta, 'makes sense'... since the entire strategy behind Sino state policy is to INTEGRATE their financial and banking sectors with those of that western world.... and grab as big a piece of the poisoned pie as possible in so doing!
Now back..... to fakenews and jaundiced view jihadi paradise;(with lots o virgin buttholes for the lil swingin dicks of exceptionally under-endowed exceptionalist merikan stooges to ogle!)
In reply to Back to Gold currency....? … by MEFOBILLS
Pagination