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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

#291

Post by throwawaylinux »

pakitan wrote: post #217
factorialboy wrote: post #178

Earlier 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.

> Necessity will force countries to find USD alternatives. You're misunderstanding the fundamental problem. It's not about a "shortage" of USD for Ghana, where they ran out of USD suppliers and no one is willing to sell them USD so they will need to switch to RUB. You get USD by exporting stuff and you can import stuff when you spend USD. The fundamental problem for Ghana is that they need to import valuable stuff bu…

They're running out of valuable stuff ignoring the gold. Most gold producing nations export their gold like any other metal or mineral, don't they?

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

#292

Post by sbaiddn »

edgyquant wrote: post #242
happyjack wrote: post #239

It is really interesting that the folks running the show in the USA are able to export a lot of the problems with the $ to the rest of the world. Caribbean nations know this first hand, and have given in to the peg. I worked in oil, and now work in an industry where I sell parts worldwide. I'm not a trained economist, but deal with currency and transfer pricing with labor and goods. Couple things: what a lot of peopl…

>They may be seeing a three letter agency from the USA very soon Yeah this shows how little your credibility is. Idiotic meme that was never true

When was it not true?

And, frankly, thats their bloody job.

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

#293

Post by nojito »

ShivShankaran wrote: post #286
bjornsing wrote: post #276

Earlier quoted context omitted.

> Ghana is shouting out loud I can’t get my hands on USD. If you have gold but can’t get your hands on USD then something is very wrong, but I doubt that is the case.

because it's not the case at all. de-dollarization is picking up rapidly across most neutral/anti-US countries and this is the start of it. China is trading with Russia in yuan and even India has allowed small players to bypass USD and trade in INR directly https://www.reuters.com/world/india/india-allows-internation... Something I have been shouting hoarse is that this war in Ukraine is going to have multi-generatio…

USD in Forex is well over $5T per day

USD in oil is barely $3T per year

Nothing external will ever pressure USD without the United States having collapsed first.

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

#294

Post by unboxingelf »

danielschonfeld wrote: post #255
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

Generally speaking yes. If from your question I deduce that you’re worried about how much we already “printed” then do some googling over why the common citing of growth of M2 chart is interpreted wrong. Spoiler - we didn’t print nearly as much as you think we did. And we generally haven’t even scratched the surface of how much more a normal growth of the currency since 2008 was needed. The question that needs to be…

  Spoiler - we didn’t print nearly as much as you think we did. And we generally haven’t even scratched the surface of how much more a normal growth of the currency since 2008 was needed.
What are you talking about? Aside from the indoctrinated belief that money printing is good and normal, in the past 2 years alone the US has printed nearly 80% of USD in existence. Our debt to GDP is over 130%.

If by “normal” you mean debasing and destroying the government money just like every empire before, sure.

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

#295

Post by kasey_junk »

ShivShankaran wrote: post #286
bjornsing wrote: post #276

Earlier quoted context omitted.

> Ghana is shouting out loud I can’t get my hands on USD. If you have gold but can’t get your hands on USD then something is very wrong, but I doubt that is the case.

because it's not the case at all. de-dollarization is picking up rapidly across most neutral/anti-US countries and this is the start of it. China is trading with Russia in yuan and even India has allowed small players to bypass USD and trade in INR directly https://www.reuters.com/world/india/india-allows-internation... Something I have been shouting hoarse is that this war in Ukraine is going to have multi-generatio…

The Chinese are demanding Russia trade in yuan because the Russian currency has, through a series of impressive self owns, become completely useless. If the Russian position was even a little less weak it wouldn’t fly because Russians don’t want yuan for the same reason Chinese people don’t, it’s an illiberal currency unsuitable for trade. That’s getting worse not better, because there is a moderate chance if China relaxed its currency controls it would crater their economy and bring the ruling class to an end.

Similarly, the INR is being (slightly) liberalized, not because Indians prefer international trade in their local currency but because it costs them so much to have such a bad currency.

There are reasons to think people would prefer a different currency to USD to be the reserve currency but it’s because it’s not liberal enough. Switching to extremely repressive currency regimes like the yuan or the rupee is counterproductive To the people who want a different international trade currency.

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

#296

Post by CamperBob2 »

immibis wrote: post #277
giaour wrote: post #202

Earlier quoted context omitted.

> 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/w…

Illegal according to whom?

Any decent human being, in the case of Russia's invasion of Ukraine.

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

#297

Post by selectodude »

ponow wrote: post #290
selectodude wrote: post #278

Earlier quoted context omitted.

Of course the dollar has devalued. That's the whole idea. It's supposed to. At a modest rate of 2% inflation, $1 should be worth 50 cents after 35 years. That's literally how currency works.

That's a policy choice, one which is non-obvious and requires serious justification. Why should people be incentivized to spend their money, morally? The mandatory inflation basically is saying, "spend your money or we'll spend it for you". How does this robbery encourage social mobility and the building of generational wealth, exactly? It's one thing to give handouts to people, and quite another to rob them. It's mo…

It's important to realize what currency really is at its core, which is not a store of value but an intermediary store of the current value of labor vs the barter value. Todays labor is worth more today than it will be in 10 years, so the dollar value of that labor should fall correspondingly. When we pick an inflation rate, we are more deciding what the time decay of todays labor should be moving forward.

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

#298

Post by [deleted] »

nojito wrote: post #293
ShivShankaran wrote: post #286

Earlier quoted context omitted.

because it's not the case at all. de-dollarization is picking up rapidly across most neutral/anti-US countries and this is the start of it. China is trading with Russia in yuan and even India has allowed small players to bypass USD and trade in INR directly https://www.reuters.com/world/india/india-allows-internation... Something I have been shouting hoarse is that this war in Ukraine is going to have multi-generatio…

USD in Forex is well over $5T per day USD in oil is barely $3T per year Nothing external will ever pressure USD without the United States having collapsed first.

[deleted]

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

#299

Post by georgeplusplus »

kasey_junk wrote: post #295
ShivShankaran wrote: post #286

Earlier quoted context omitted.

because it's not the case at all. de-dollarization is picking up rapidly across most neutral/anti-US countries and this is the start of it. China is trading with Russia in yuan and even India has allowed small players to bypass USD and trade in INR directly https://www.reuters.com/world/india/india-allows-internation... Something I have been shouting hoarse is that this war in Ukraine is going to have multi-generatio…

The Chinese are demanding Russia trade in yuan because the Russian currency has, through a series of impressive self owns, become completely useless. If the Russian position was even a little less weak it wouldn’t fly because Russians don’t want yuan for the same reason Chinese people don’t, it’s an illiberal currency unsuitable for trade. That’s getting worse not better, because there is a moderate chance if China r…

China demands payment in useless currency.

What part of this narrative makes sense to you?

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

#300

Post by sbaiddn »

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?

1. Because, realistically, you have to hold relatively large amounts of USD. Transactions take time, they cost money, they're volatile, US currency markets might be 12 time zones away -> Reserves aren't just economic insurance for bad weather, they're also buffers.

The big difference:

2. Since you need large reserves (see 1), why hold USD and see it inflate away? No one holds USD. What they hold and trade are treasuries. The return is small, but if you have 10 billion in reserves, 100 million isn't spare change This is the real lynchpin:

- the massive market for treasuries significantly lowers the cost of the US' deficit. The US can debt finance itself artificially lowering taxes or inflation.

- To maintain this position, "dollars" have to available -> the US must run a deficit. If there were no more deficits, the debt would wither, there would be a global monetary contraction.

- Effectively this is a way of exporting inflation: the treasury issues debt -to finance government -> the t-bills are treated as equal to USD -> the excess currency is soaked up by 8 billion people instead of 330 million

- unlike cash, the treasury can wake up one day and wipe (I mean "freeze") your account if you've been naughty. Imagine PayPal writ large.

In the short run it works great for the US, but in the long run it makes exports more expensive therefore eroding US industry. Short term gain for long term pain? Politicians love it!

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