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Ghana plans to buy oil with gold instead of dollars

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Re: Ghana plans to buy oil with gold instead of dollars

#141
post #74
post #53

Earlier quoted context omitted.

Do you think GDP is the critical factor for determining a global reserve currency? IMO, respect for property ownership rights, legal/judicial recourse, ubiquity of US banks, and political stability are large contributing factors that few other countries can compete with. China has a pretty checkered past regarding ownership rights for citizens who are critical of its leadership.

I suspect it's a prerequisite, though perhaps not the only one. I also suspect that political stability is more likely to favour China than the USA over the next few decades — it is very human for success to be followed by the assumption of indefatigability and that to be followed by fighting over who leads the nation, rather than continuing to focus on what actually made a nation dominant and how to keep it that way…

The UK lost its literal empire because of the costs of two wars that devastated the continent - not domestic politics. On the other hand, the PRC is turning back on itself. It has been unable to produce a successor to Xi - making it very hard to change direction. Under Xi, it has actively cultivated hostility against itself and only manages to exercise influence others through force. It also has much less stable demographics. It is not reasonable to expect China to collapse and it would be fearful if they did, but they are likely to have a much less stable period ahead as they come to terms with their situation.

As for the US, they're not alone in this but they are now in a situation where younger voters with a longer time horizon are able to win majorities against older voters with shorter time horizons. This means they're entering into a period of creativity. It is not clear what the outcome will be. But it is clear that we cannot take for granted that pursuit of an unreformed ideology will distract them from the compromise and teamwork that brought them to strength.

In both cases, I think you're extrapolating from recent politics. But both countries are in different turns of the demographic wheel, and have different ways of dealing with that. Democracy also tends to make turmoil more obvious to external observers, so it's easy to accidentally compare apples to oranges when you're looking at a democracy and an autocracy.

Re: Ghana plans to buy oil with gold instead of dollars

#142

We'll see the dominance of the USD erode in the next three decades is my prediction. Look at how successful Putin was in demanding payment for Russian oil in Rubles. It has propped up the Ruble enormously and its predicted collapse hasn't occurred. In fact it has rallied. I assure you that other nations have taken note and will take similar steps in the future. Other commodities may well be priced in local currencies…

The "prop up the ruble" effect was negative to russia. It happened because export to russia totally stalled. So, russia still exported oil and gas, but could not buy anything for earned currency. For example, in August German export to russia dropped 45.8%, while imports dropped only 6.7% - and that only due to gas price increase. Now they import 0 gas.

>I assure you that other nations have taken note and will take similar steps in the future.

Why would any country do that if they don't plan similar genocidal war?

Re: Ghana plans to buy oil with gold instead of dollars

#143

This has nothing to do with USD dominance as many are suggesting. Ghana is running out of USD reserves and has to resort to buying with gold. Nothing suggests they wouldn’t use USD if they had it.

It has everything to do with USD dominance. Ghana is shouting out loud I can’t get my hands on USD. They’re echoing what the global market in general has been pricing. Now true, having your product be a hot commodity everybody wants is good for business but there’s only so much of that before your competitor starts offering a more readily available product. Pepper that with some morally objectionable stances the US h…

Are you advocating for printing more USD?

edit: not sure why I'm being downvoted for asking a relevant question

Re: Ghana plans to buy oil with gold instead of dollars

#144
post #29

Earlier quoted context omitted.

As for what happens next: de-globalisation I predict we'll see blocks forming up again, something like: - West (US+EU) - East (China+Russia) - India (India, Sri Lanka, Himalayan States, South China states) - Middle (Middle East+North Africa) - Latam (Central + South American States) One wild card IMO would be the rise of the Indian sphere of influence. I'll leave some room for India's remarkable ability to snatch def…

I agree with the general premise of your comment, that this is a small sign of the deglobalization which is _already_ under way. But, what are the UUUGE tailwinds benefiting India? India, even more so than China, seems likely to "get old before it gets rich." Its TFR is already below replacement and falling rapidly.

I strongly disagree with on demographics, it looks really good for most of the century. Everything including TFR, young population, working population and even elderly populations looks REALLY good. Especially relative to China.

Demographics aside, India is a perfect replacement for China in high tech manufacturing. Stability is a huge factor here giving India a massive edge compared to south east asian alternatives.

On top of that, you have young highly skilled & literate workforce. A largely discounted wealthy diaspora investing back into the motherland. Huge pool of software talent.

IMO it makes for a huge Shenzhen like moment for India. Again, I leave a massive amount of room for India to duck this up but it is India's opportunity to fuck up. The winds have shifted heavily in their favour.

Re: Ghana plans to buy oil with gold instead of dollars

#145
post #114

Earlier quoted context omitted.

>the Soviet Union took 50 years to go from agrarian to space That's a naive view of russia. Up to this day, one of the main tasks of russian army - as previously soviet - is potato harvest.

I can certainly believe they're like that today, given how inept they obviously are in every aspect of the Ukraine war. So much so, I will take that at face value without even bothering to google it even though it would've seemed like a surprising and unbelievable claim this time last year. That doesn't mean they didn't go to space, nor does it mean they didn't industrialise, nor does it mean they weren't a significa…

Agreed. It's also important to look at context of all of those achievements.

For example, industrialization was greatly driven by foreign engineers and companies.

Like, one of the most important figures in pre-WW2 industrialization.

https://en.wikipedia.org/wiki/Albert_Kahn_(architect)

That continued after WW2. Russia was dependant on western trucks, a lot of which they gained via Land-Lease. So, they literally bought truck factory from the western companies - Kamaz - that they obviously branded as their great achievement.

Production: https://pbs.twimg.com/media/FVI8MeOWAAEBhMB?format=jpg&name=...

Receipts: https://pbs.twimg.com/media/FVI8lAGWUAA37eD?format=jpg&name=... https://pbs.twimg.com/media/FVI8l9eXwAEvMKM?format=jpg&name=...

Re: Ghana plans to buy oil with gold instead of dollars

#146

Honest question: Can someone explain me why using gold instead of dollars to buy oil isn't the same as sell gold for dollars and use those dollars to buy oil?

I don't think it is different, apart from any issues with timing of the buying and selling and price changes in between. I think this is more a question that the government doesn't have the gold and buying it from the miners is how they will get it. I don't think they are giving the miners a bad deal, other than forcing them to accept Cedis. I believe the net effect is that fewer Cedis are put on the market for dollars and this prevents a price drop in Cedis.

Re: Ghana plans to buy oil with gold instead of dollars

#147
post #121

Earlier quoted context omitted.

I think it’s more an issue of other countries seeing that the U.S. can just confiscate their dollar reserves if the US doesn’t agree with their sovereign actions. Those countries are choosing to divest from the mono world order which is crumbling. For a long but instructive discussion on current economic events check out this interview. https://youtu.be/cD_UcRtljDU

“Mono world order” is a fun euphemism for “boo hoo we’re not allowed to run around the planet conquering other people”. You’re free to “divest” as you put it… But you’re still expected to behave & play nicely with your neighbors.

“Mono world order” is the appropriate term when the US can go around conquering other people in their perceived self interest (Iraq, Afghanistan) but says nobody else can.

Re: Ghana plans to buy oil with gold instead of dollars

#148

Earlier quoted context omitted.

I agree with the general premise of your comment, that this is a small sign of the deglobalization which is _already_ under way. But, what are the UUUGE tailwinds benefiting India? India, even more so than China, seems likely to "get old before it gets rich." Its TFR is already below replacement and falling rapidly.

China's official TFR figures are massively engineered: https://www.project-syndicate.org/commentary/chinese-populat... India ones are still over replaceability.

With respect to point of original argument:

>get old before it gets rich

If PRC's official population is as low as Yi thinks, then her per capita GDP is already "secretly" high income at ~14000 USD. She would technically already have gotten rich before old. CCP has incentive to overreport population / underreport GDP to keep "developing" country status.

>India ones are still over replaceability

Indian overall TFR this year is ~2.0, but more important to break down Indian TFR by state, which will reveal all the high HDI/developmed/educated regions are ~1.6 and trending down, while the underdeveloped and poorly educated regions are still >2. The TLDR is India's demographic divident in her high potential regions is basically over, while low potential regions are generating excess bodies that will have little opportunity develop. Recipe for disaster in democracy, and hence:

> India, even more so than China, seems likely to "get old before it gets rich."

Of course India is going to grow, by a lot, but much of her high potential demographic divident is already tapped out while stuck in low middle income unless the system get it's shit together.

Re: Ghana plans to buy oil with gold instead of dollars

#149

Interesting the pressure is increasing. More and more countries questioning why they need to base their foreign transaction on the US Dollar. Could this mounting unrest be as a result of the seeming inability of the US Federal bank in checking inflation of the US Dollar. Also, some of these Nations can no longer determine what benefit it is to them is using the US Dollar as their reserve currency and trading currency…

Somewhere in my comment history I made the prediction "It will be possible to buy large amounts of oil without USD by 2024" - so I think I've got a decent track record on this subject. I'm much less confident in these predictions than that one, but I'll predict Saudi Arabia won't go off the USD because they depend on US military support in a pretty warlike part of the world and the CFA will be replaced by 2027 as cur…

CFA? What are you referring to here, not the financial certification institution I'm guessing?

Re: Ghana plans to buy oil with gold instead of dollars

#150

Interesting the pressure is increasing. More and more countries questioning why they need to base their foreign transaction on the US Dollar. Could this mounting unrest be as a result of the seeming inability of the US Federal bank in checking inflation of the US Dollar. Also, some of these Nations can no longer determine what benefit it is to them is using the US Dollar as their reserve currency and trading currency…

Somewhere in my comment history I made the prediction "It will be possible to buy large amounts of oil without USD by 2024" - so I think I've got a decent track record on this subject. I'm much less confident in these predictions than that one, but I'll predict Saudi Arabia won't go off the USD because they depend on US military support in a pretty warlike part of the world and the CFA will be replaced by 2027 as cur…

The US is exploiting it to the maximum with the Inflation Reduction Act, etc.

The rest of the world will react eventually, the Zelenksy-Putin puppet show will only distract them for so long.

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