So that's why they received that penalty in recent game vs Portugal. It was a warning.
Ghana plans to buy oil with gold instead of dollars
201–210 of 407 posts
Re: Ghana plans to buy oil with gold instead of dollars
#202Earlier quoted context omitted.
It has everything to do with USD dominance. Countries have resources thus commodities. Commodities have value. Real value. Trade in local currencies can be backed by these commodities. Necessity will force countries to find USD alternatives.
Add to this that the US Federal government has conducted numerous hot wars to protect USD dominance. Remember when Saddam Hussain and then Kadafi in Libya each started selling dollars for euros? War. https://bitcoinmagazine.com/markets/petrodollar-deep-dive-wi... But now the US is even destroying confidence in the dollar, through its confiscation of the Afgan central bank reserves (which included private citizens' de…
> even though the international settlement system was meant to be apolitical
“Apolitical” does not mean “usable by any party for any transaction.” SWIFT policy prohibits using its system in support of illegal activity [0], and the settlement system has been denied to sanctioned countries before [1].
[0]: https://www.swift.com/about-us/legal/compliance-0/fighting-i...
[1]: https://www.aljazeera.com/economy/2018/11/5/what-swift-is-an...
Re: Ghana plans to buy oil with gold instead of dollars
#203Suggested Thought Experiment:
For folks getting really excited here about the US, the US Dollar, etc. - imagine that, for some weird reason, the world's reserve currency was the Tongan paʻanga ( https://en.wikipedia.org/wiki/Tongan_pa%CA%BBanga ). And that (similar to what the the story notes, for USD) Ghana's reserve of paʻanga was running low, so they were looking to buy oil with gold instead of paʻanga, to (as others have noted) put a smokescreen in front of a big new tax on local gold producers in Ghana. (Gold was ~50% of Ghana's exports in 2019, so there's plenty of income to tax there.)
How differently would you view this situation and story, if "US" and "USD" were replaced with (presumably emotionally neutral) "Tonga" and "paʻanga"?
Re: Ghana plans to buy oil with gold instead of dollars
#204This 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…
Doesn't help that the US seems set on destroying the world's confidence in the US dollar:
first the 2008 financial crises and monetary creation (I.e. devaluation) in response;
then much more recently they hammered nails in the coffin of Breton Woods 2 (I.e. the post-1971 monetary status quo of floating fiat currencies) by confiscating the Afghan Central Bank's reserves (which included private individuals' deposits, and they gave the money to families of September 11th victims) and by freezing the assets of the Russian Central Bank. inter-Central Bank settlements were supposed to be apolitical.
All that in the context of multiple hot wars (Iran in 2003 and then Libya, perhaps?) and military actions that appear to be in defense of US dollar dominance: https://bitcoinmagazine.com/culture/the-hidden-costs-of-the-....
Re: Ghana plans to buy oil with gold instead of dollars
#205Earlier 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…
> Ghana is shouting out loud I can’t get my hands on USD. That doesn't make sense - just take some gold, and buy USD. Is there some physical shortage of paper or something?
If you’re referring to the paper USD is printed on, it’s cotton rather than paper.
But even if there was a shortage, I doubt that on a country level USD (or any currency, for that matter) is bought in physical form - it’s just credited to the country’s bank account.
Re: Ghana plans to buy oil with gold instead of dollars
#206For people saying that this is a sign of the dollar dominance ending consider this. Gold is valued in dollars. Oil is valued in dollars. Any gold for oil exchange will be decided by the going dollar rate of each. Counter parties and middlemen assisting this trade will be hedging their positions with dollar settled derivatives traded on deep and liquid dollar markets.
"For people saying that this is a sign of the dollar dominance ending consider this ..."
I think you are mistaken.
The technical fungibility of dollars/gold/oil is irrelevant.
The requirement to sell other assets to buy dollars in order to settle oil is not a minor detail - it's the whole point ...
... and it would, indeed, be a sign of an erosion of US currency and trade dominance ... which is why it's not going to happen.
Ghana will either not go through with this plan or they will proceed and pay an enormous economic and political price ... or worse.
Re: Ghana plans to buy oil with gold instead of dollars
#207Bypass the petrodollar? Very risky business. What a great way to end up suffering from a three letter agency triggered coup d'etat
Re: Ghana plans to buy oil with gold instead of dollars
#208Bypass the petrodollar? Very risky business. What a great way to end up suffering from a three letter agency triggered coup d'etat
>three letter agency triggered coup d'etat
that's if ghana is lucky and they don't try to liberate them from [insert lies] with bombing and boots on the ground.
Re: Ghana plans to buy oil with gold instead of dollars
#209Im curious about the mechanics of how this helps, could they not sell the gold for dollars to buy the oil?
This. People seem very exercised about using the dollar specifically to buy oil, but .. currencies are fungible? You can trade them on international markets? Also, where does the gold come from? Is it just their central bank reserve? No, it seems that Ghana is experiencing the classic forex problem of not being able to export enough valuable production in order to afford its imports, and it's very hard to reduce impo…
Can always bring in investors
Re: Ghana plans to buy oil with gold instead of dollars
#210Earlier quoted context omitted.
>"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 c…
Berlin Wall did not cause the collapse of the USSR, it was one of the results of generally declining empire and change of it policies that again came from the top. Gorby and Reagan had decided to be "friends"