- The major agreement discussed was the petrodollar, which as been in place for over 50 years.
- Russian President Vladimir Putin made it clear that the Chinese yuan—not the dollar—is his favored currency to conduct trade in.
There are two ways the dollar could lose its place in the world economy:
- Encroachment, where another currency supplants the dollar—the very same way that the dollar replaced sterling a century ago…
- Or abdication by the U.S., where we pursue policies that shrink back from the global role it previously sought.
The dollar may not be eternal—but it won’t be China that knocks it down.
- Despite China being Saudi Arabia’s biggest customer, there’s no signs the Saudi’s will price oil in yuan.
- Additionally, the Chinese yuan is simply not convertible—China’s foreign-exchange rate is closely managed and purposefully opaque.