Just one prediction for 2023, but it’s a grave one about the petrodollar, its fate, and the consequences therefrom:
The petrodollar is the centerpiece of American hegemony. I predict that in 2023, at the latest 2024, that system will end. Its demise may be disguised by the mainstream and financial press, but it will be self-evident in the transactions themselves, and its aftershocks will be mighty.
Now, the end of the petrodollar system has been a long time coming, of course. It’s been a major goal of America’s strategic competitors for years. In 2017, China and Russia created the petroyuan so that its partners could trade for oil without using dollars. However, the petroyuan did not unseat the petrodollar in the six intervening years. 80% of oil transactions remained in USD. Why?
- Saudi Arabia, the linchpin of the petrodollar system, continued to insist on using dollars in its transactions.
- The Chinese continued to be reliant on trade with the US to fuel their economy, and thus could not risk destroying the system that made the US dollar valuable.
- The US has a proven track record of using military force to support the petrodollar, and with Donald Trump in charge — known to Chinese citizens as “Emperor Trump” for his vigorous policies — the Chinese were reluctant to “fuck around and find out.”
Now those conditions have changed.
Read the whole thing there, keeping in mind that while timings are always uncertain, trends are often clear.