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Ghana plans to buy oil with gold instead of dollars

aljazeera.com

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

#191

Post by rsync »

gtirloni wrote: post #143
danielschonfeld wrote: post #135

Earlier quoted context omitted.

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

I downvoted you because you complained about your downvotes.

Don't watch the score and, especially, don't complain about it.

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

#192

Post by [deleted] »

danielschonfeld wrote: post #94
norswap wrote: post #63

Earlier quoted context omitted.

> Could this mounting unrest be as a result of the seeming inability of the US Federal bank in checking inflation of the US Dollar. This is completely backwards. The problem right now is that the dollar is too strong , meaning expensive wrt other currencies. In this context, inflation of the USD supply, leading to devaluation of the USD would actually help other countries that are suffering from the strong dollar. I'…

And there in lies the rub. To keep countries placated we need to create more debt, a metric ton of more debt and hence more broad currency. But doing so at the moment is political suicide as is proven by the left's efforts (deficit spending blah blah etc). Triffin paradox predicted in the 60s at it's full glory. It's also worth noting that at the moment both the Fed and the Treasury (obv) are mandated to be operating…

[deleted]

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

#193

Post by giaour »

Ekaros wrote: post #31
peter-m80 wrote: post #26

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?

For two parties to transact in dollars they need either to physically hold large amounts of dollars. Or have access to some shared ledger that is accounting system where transactions can happen. Say A, B, C account. A sells gold and get dollars from account B to account A. And now they can buy oil from owner of account C. But who owns and runs these accounts or the transactions between them? One option is SWIFT syste…

> One option is SWIFT system. Which Russia got excluded in some capacity from. As such it is clear that system cannot be trusted.

That is quite a leap. Russia was also excluded from the NY stock exchange due to the ongoing sanctions; does that mean we can no longer trust stocks bought and sold there?

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

#194

Post by rsync »

luciusdomitius wrote: post #119
nickdothutton wrote: post #102

Earlier quoted context omitted.

The US export of inflation via engineered demand for petrodollars (and one could say enforcement via aircraft carrier groups) is an under appreciated effect.

It is literally the most controversial concept in today's geopolitics. Study politics science in Dover - it is a conspiracy theory. Study PS in Calais - it is the exorbitant privilege and a cornerstone of global injustice. And it is not like France and the empire are rivals. https://en.m.wikipedia.org/wiki/Exorbitant_privilege

... charitably, I think your parent refers to underappreciation within the United States which I think is a fair assessment.

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

#195

Post by colechristensen »

Spooky23 wrote: post #45
kaladin_1 wrote: post #3

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…

Unlikely. Ghana happens to be a gold producer; they may see this as a better deal for them, and may get some other benefit from a country like China for rattling the cage.

What’s more likely is that Ghana is using monetary policy as a cover for acquiring locally produced gold at a lower price and selling it abroad for resources to make up for trade deficits.

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

#196

Post by ethbr0 »

FpUser wrote: post #175
ethbr0 wrote: post #69

Earlier quoted context omitted.

China can't tank imports until they finish pivoting to their own internal, consumptive middle class. And probably not even then. The plan the international community hoped for is actually somewhat working, the timeline for China's giant population to metabolize it was just wrong. Large Chinese middle class = power = political risk to disrupting the economy = incentive not to rock the international trade boat's status…

>"Unfortunately, China probably also learned from the USSR that the entire charade only collapses when you blink and refrain from using the military to crush civilian dissent." Baloney. USSR did not crush because of "civilian dissent". All the changes were driven from the top.

The Berlin Wall fell because the East German authorities and the USSR declined to shoot civilians.

And the fact that order wasn't given was mostly due to bureaucratic ineptitude and delay, rather than intent. https://en.m.wikipedia.org/wiki/Fall_of_the_Berlin_Wall#Crow...

It could have easily been Hungary 1956, Czechoslovakia 1968, Georgia 1989 instead.

Progress trends towards freedom, but it can walk over a lot of corpses on its way there. :(

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

#197

Post by eunos »

luciusdomitius wrote: post #99
kaladin_1 wrote: post #3

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…

The petrodollar is a really weird thing. According to its critics, it is a global monopoly on violence and pure extortion, to its implementors - merely a conspiracy theory. Please, before you clinge to the conspiracy theory label, check how many great people such as de Gaulle have whined against it and what is Privilege l'exorbitant in French political science. In reality, global trade is not in USD purely because it…

> Petrodollar Is rather remnant of the past. FYI I think half of world forex reserve is held in the 5 entities in East Asia (CN, JP,KR,TW,HK). Whatever dollar the Petrostate get (sans Russia) they recycled it to various goods and services mostly sourced from East Asia.

> Btw does anyone know how did the MBS-Xi meating go?

Will commence in December, previously rumored didn't happen

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

#198

Post by rsync »

danielschonfeld wrote: post #94
norswap wrote: post #63

Earlier quoted context omitted.

> Could this mounting unrest be as a result of the seeming inability of the US Federal bank in checking inflation of the US Dollar. This is completely backwards. The problem right now is that the dollar is too strong , meaning expensive wrt other currencies. In this context, inflation of the USD supply, leading to devaluation of the USD would actually help other countries that are suffering from the strong dollar. I'…

And there in lies the rub. To keep countries placated we need to create more debt, a metric ton of more debt and hence more broad currency. But doing so at the moment is political suicide as is proven by the left's efforts (deficit spending blah blah etc). Triffin paradox predicted in the 60s at it's full glory. It's also worth noting that at the moment both the Fed and the Treasury (obv) are mandated to be operating…

"Meaning we run a global reserve currency with no 'department' in charge of the global part."

You are mistaken - there is an enormous "department" in charge of the global part: the US Navy.

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

#199

Post by gtirloni »

rsync wrote: post #191
gtirloni wrote: post #143

Earlier quoted context omitted.

Are you advocating for printing more USD? edit: not sure why I'm being downvoted for asking a relevant question

I downvoted you because you complained about your downvotes. Don't watch the score and, especially , don't complain about it.

I did not complain. Maybe you should revisit your downvoting principles.

I inquired why I was being downvoted for asking a question. I was genuinely curious about how that was bad.

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

#200

Post by notahacker »

analog31 wrote: post #167
notahacker wrote: post #125

Earlier quoted context omitted.

This sibling comment has the answer to that: it helps disguise the margin the government makes on gold it compulsory purchases from local miners in local currency https://news.ycombinator.com/item?id=33742853 Also helps to look like you're doing something about a debt crisis even if the net effect is minimal or negative...

It shouldn't be hard for the miners to guess that margin, given that the market price of gold can be looked up. Gold is, for all intents and purposes, usable as money, at least between sophisticated parties such as governments. It lacks some of the features of USD, but if Ghana is out of USD, then those features don't matter to them.

Oh, the mining company management will know what the spot price in dollars is and if the spot price offered in cedis doesn't seem fair. But "we've found a cunning new way to exploit our gold reserves" is a better PR line to the general public than "we're fudging the figures a bit in our favoir*

Look at HN's somewhat sophisticated audience heralding it as a power move against the dollar rather than a country scrabbling around for ways to dig itself out of a financial hole caused in part because the dollar holds value much better than their own currency.

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