Crude oil, the master commodity, has been priced in dollars for the past 4 decades.
After the collapse of the Bretton Woods agreement, which ended the gold standard in the 1970s, President Nixon made a deal with the Saudis to make the U.S. dollar the currency that was used to buy oil.
The U.S. provided protection to the Saudi kingdom, other Arab states followed the same path, and by 1975, in order to buy the most sought-after commodity in the world, you needed to have U.S. dollars.
This created a scenario where the U.S. could run up deficits with low interest rates, with the rest of the world having no real say in the matter because the petrodollar gave the U.S. an economic hegemony. China and the world needed to buy more dollars in order to fuel their economies with oil.
That is, until now.
China, who is the second-largest oil consumer, has just launched a new futures contract.
It’s a yuan-based, gold-backed crude oil contract.
China didn’t just try to compete against the U.S. dollar. In order to attract oil providers to this yuan-based oil contract, they made it convertible into gold!
Gold, of course, is the king of money – the master currency.
I’ve personally never seen such a bullish event take place for gold or a more bearish one for the U.S. dollar.
Long-term, the dollar is dead.
One of the top experts on the U.S. dollar, gold, Bitcoin, and the global economy is my good friend Andy Hoffman.
He’s recently launched a new blog called CryptoGoldCentral.com
It will be one of the few blogs I check daily. What I love about Andy is that all of his commentary is original and he seems to pick up things others don’t and call out B.S. when he sees it.
We just posted a new interview with Andy Hoffman, perfect for your Sunday pleasure or to start your week tomorrow.
Russia, India, Brazil, China, and others are preparing for the end of the petrodollar right now.This will lead to further devaluation, gold hitting all-time highs priced in dollars, and Bitcoin to be seen as a much better alternative to fiat currencies that are run by central banks.
A paradigm shift is happening now.
Be sure to visit Andy’s blog at CryptoGoldCentral.com