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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

#171

Post by jacooper »

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…

And this the entire problem.

The dollar shouldn't be a global currency.

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

#172

Post by jacooper »

Hayvok wrote: post #162
rayiner wrote: post #147

Earlier quoted context omitted.

“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.

If you want the real-politick answer then “yeah, absolutely”. What’s your point? But the U.S empire has been pretty amazing for a pretty amazing number of people across the globe, and it is shockingly easy to stay on the good side of U.S. foreign policy. Be reasonably democratic, don’t genocide undesirable elements of your population, don’t pick on other reasonably democratic countries, don’t threaten world trade and…

> But the U.S empire has been pretty amazing for a pretty amazing number of people across the globe, and it is shockingly easy to stay on the good side of U.S. foreign policy.

Hell no

> Be reasonably democratic, don’t genocide undesirable elements of your population, don’t pick on other reasonably democratic countries, don’t threaten world trade and resources, don’t steal all the Americans’ stuff by suddenly socializing industries in your country, don’t fund terrorist activity against them.

I'm sure Iraq and Palestine would agree.

And of course the country that did very well to the world, also wanted to illegally control the worlds population for its own interest.

https://en.wikipedia.org/wiki/National_Security_Study_Memora...

> Yeah you can find exceptions to every one of those listed items - welcome to global politics.

Which is why everyone wants to get rid of the dollar.

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

#173

Post by dehrmann »

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…

> More and more countries questioning why they need to base their foreign transaction on the US Dollar.

For spot transactions, it doesn't really matter beyond giving the buyer and seller a common language to negotiate in. For contracts sometime in the future, if you're Argentina, no one wants to bet on where the Peso will be in 6 months.

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

#174

Post by thaumasiotes »

themihai wrote: post #130
thaumasiotes wrote: post #84

Earlier quoted context omitted.

> I think this is important as tomorrow Fed's decision is no longer that important for your energy costs. The Fed decision wasn't important to energy costs anyway, though. Oil is priced in dollars, but the price changes minute-to-minute. Whatever the Fed decides about the value of a dollar, the oil price will reflect that. If you're involved in a long-term contract involving the exchange of oil for dollars, then the…

>> The Fed decision wasn't important to energy costs anyway, though. Of course it was. Rate hiking makes the dollar more expensive for anyone buying dollars(to pay for the oil). Were they dealing with gold they would not have this issue. Not to mention if the buyer is a gold producer.

So what? Rates go up, dollars get more valuable, it's more expensive to buy dollars than it used to be, and each dollar buys more oil than before.

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

#175

Post by FpUser »

ethbr0 wrote: post #69
988747 wrote: post #66

Earlier quoted context omitted.

Property rights and such are secondary. The primary issue is: who has the power? Right now the answer to that question is "US", but since China is catching up on GDP, and, unlike US, actually manufactures things. If China decides that they want payments for all the goods that they export to be in RMB then there's nothing the rest of the world can do about it, except stop all the imports from China (which would take d…

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.

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

#176

Post by miguelazo »

whatever1 wrote: post #158
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

People outside the US love it, so no issue with devaluing the USD if we print an extra couple of trillions. The main issue is that the global supply chain cannot literally serve richer American consumers, so the cost of supply increases and everyone (in the US and out) faces inflation pressure.

People outside the US loved it. Recent moves by Japan, Switzerland and some others in the (quickly-losing-liquidity) Treasury Market suggest that era is coming to a close.

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

#177

Post by jacooper »

KptMarchewa wrote: post #142
UltraViolence wrote: post #86

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 s…

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

Because not everybody likes to be controlled by the US?

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

#178

Post by factorialboy »

jonnybgood wrote: post #98

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.

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.

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

#179

Post by yxhuvud »

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?

Because of changes of the relative values between gold, dollars and oil over time has implications. If they have a more reliable source of gold than of dollars then it may make sense from their point of view. It is of course up to the oil producers if they want to be on the other side of that risk.

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

#180

Post by ars »

danielschonfeld wrote: post #135
jonnybgood wrote: post #98

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…

> 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?

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