How does Russia bypass the "petrodollar"?

[rupol2000]

Around 2014, Russia sold all US Treasuries, Russia is not officially on the list of Treasury holders. But Russia sells a lot of oil. In financial circles, it is generally believed that the Russian central bank do the "currency board" policy. That is, they invest export earnings in foreign government debts, and these debts cover the issue of the ruble.


If Russia abandoned the dollar, then how does it sell oil, because it is commonly believed that oil is traded in dollars?

If oil profits are in dollars, then Russia must somehow convert dollars into Euros, how does it do it?

 

[Muhammed]

They will sell it to China.

 

[justoffal]

Around 2014, Russia sold all US Treasuries, Russia is not officially on the list of Treasury holders. But Russia sells a lot of oil. In financial circles, it is generally believed that the Russian central bank do the "currency board" policy. That is, they invest export earnings in foreign government debts, and these debts cover the issue of the ruble.


If Russia abandoned the dollar, then how does it sell oil, because it is commonly believed that oil is traded in dollars?

If oil profits are in dollars, then Russia must somehow convert dollars into Euros, how does it do it?

China can easily launder all of their trade with anything and everything that is commoditized...hell it could be sneakers....Biden pretty much alluded to it the other day when he noted that Russia would be willing to produce more crude to put downward pressure on gas prices....and that it would be shipped from China...trust me they have circumvented the dollar system....

 

[rupol2000]

China can easily launder all of their trade with anything and everything that is commoditized...hell it could be sneakers....Biden pretty much alluded to it the other day when he noted that Russia would be willing to produce more crude to put downward pressure on gas prices....and that it would be shipped from China...trust me they have circumvented the dollar system....

Actually, China holds treasuries, although Chinese consumer goods are not included in the dollar system at all, they do it voluntarily.

 

[justoffal]

Actually, China holds treasuries, although Chinese consumer goods are not included in the dollar system at all, they do it voluntarily.

Yep...they see it as an investment in the future...
And to the extent that they trade manufactured commodities in dollars I suspect they can balance sheet transactions on hard goods and rectify it downstream...hell they probably do it with an abacus....lol.

 

[KissMy]

Yep...they see it as an investment in the future...
And to the extent that they trade manufactured commodities in dollars I suspect they can balance sheet transactions on hard goods and rectify it downstream...hell they probably do it with an abacus....lol.

China is the worlds #1 manufacturer of goods. Russia would be thrilled to sell oil in yuan or gold they can directly exchange for nearly anything they want. They no longer pay petrodollar exchange or inflation tax or are under the thumb of the USA.

 

[justoffal]

China is the worlds #1 manufacturer of goods. Russia would be thrilled to sell oil in yuan or gold they can directly exchange for nearly anything they want. They no longer pay petrodollar exchange or inflation tax or are under the thumb of the USA.

I believe this is why Russia has not yet collapsed. Think about it for a minute. If the ruble is only worth a penny how does the average Russian even buy a loaf of bread??? Yet they continue to do so....how?? There is obviously an economy over there right now between Russia and China that we have no way to measure or any way to affect. I believe the Chinese have kept it off of the forex so that it is not examinable.

 

[KissMy]

I believe this is why Russia has not yet collapsed. Think about it for a minute. If the ruble is only worth a penny how does the average Russian even buy a loaf of bread??? Yet they continue to do so....how?? There is obviously an economy over there right now between Russia and China that we have no way to measure or any way to affect. I believe the Chinese have kept it off of the forex so that it is not examinable.

That type of currency collapse is very uneven. Russia has it's own food, water, sewer, electricity, oil, fuel gasoline, ect, so those prices would not change much. Anything imported would skyrocket or be unavailable, unless Russia is selling oil in yuan & China is supplying all the imports they want.

 

[rupol2000]

That type of currency collapse is very uneven. Russia has it's own food, water, sewer, electricity, oil, fuel gasoline, ect, so those prices would not change much. Anything imported would skyrocket or be unavailable, unless Russia is selling oil in yuan & China is supplying all the imports they want.

What is produced domestically still depends on inflation, there is a lot of German equipment and components in production, and so on. In addition, the market will seek to stimulate exports and reduce domestic production. In such a situation, export is always profitable.

 

[justoffal]

That type of currency collapse is very uneven. Russia has it's own food, water, sewer, electricity, oil, fuel gasoline, ect, so those prices would not change much. Anything imported would skyrocket or be unavailable, unless Russia is selling oil in yuan & China is supplying all the imports they want.

It has to be overland delivery both countries have massive rail systems and Russia has endless diesel fuel....the Petro-yuan is eerily present IMO.

 

[KissMy]

What is produced domestically still depends on inflation, there is a lot of German equipment and components in production, and so on. In addition, the market will seek to stimulate exports and reduce domestic production. In such a situation, export is always profitable.

Halting foreign exchange does not cause domestic inflation like printing money. It only causes inflation of items from countries who participate in the currency wars.

China makes nearly everything & would love to be Russia's only supplier without any price competition.

 

[surada]

Around 2014, Russia sold all US Treasuries, Russia is not officially on the list of Treasury holders. But Russia sells a lot of oil. In financial circles, it is generally believed that the Russian central bank do the "currency board" policy. That is, they invest export earnings in foreign government debts, and these debts cover the issue of the ruble.


If Russia abandoned the dollar, then how does it sell oil, because it is commonly believed that oil is traded in dollars?

If oil profits are in dollars, then Russia must somehow convert dollars into Euros, how does it do it?

Iran and Russia seek to topple the petrodollarâs dominance: National InterestÂ

TEHRAN - In a commentary on February 4, The National Interest said Iran and Russia, as two countries subject to U.S. sanctions, are seeking to undermine the petrodollar’s dominance in global finance and trade.

www.tehrantimes.com

 

[rupol2000]

Iran and Russia seek to topple the petrodollarâs dominance: National InterestÂ

TEHRAN - In a commentary on February 4, The National Interest said Iran and Russia, as two countries subject to U.S. sanctions, are seeking to undermine the petrodollar’s dominance in global finance and trade.

www.tehrantimes.com

These were just empty words. In addition, Moscow has almost no trade with Iran.

 

[DudleySmith]

Russia has lots of trade with India and China; they can barter all day long for imports from those two fairly large countries. Plus Russia trades other commodities, like Palladium and nickel. Guess what those are used for? No embargoes on either of those yet.

 

[justoffal]

Halting foreign exchange does not cause domestic inflation like printing money. It only causes inflation of items from countries who participate in the currency wars.

China makes nearly everything & would love to be Russia's only supplier without any price competition.

Exactly.... Congress can't even legally demand that China does not ship American items to them since they are made in China and all manufacturing licenses in China depend on 51% ownership by the CCP. Like I said before there is absolutely nothing that we deny Russia that they can't get from China nothing at all.

 

[DarthTrader]

Yep...they see it as an investment in the future...
And to the extent that they trade manufactured commodities in dollars I suspect they can balance sheet transactions on hard goods and rectify it downstream...hell they probably do it with an abacus....lol.

Treasuries by definition are not an investment (they have negative real yield).

They are "good-as-money" liquidity instruments. Perhaps study that more.

 

[justoffal]

Treasuries by definition are not an investment (they have negative real yield).

They are "good-as-money" liquidity instruments. Perhaps study that more.

Assuming we're on the same subject which would be trading that is founded on some alternative reserve ( Petro-yuan?).... How would using treasuries get that done?

 

[DarthTrader]

Assuming we're on the same subject which would be trading that is founded on some alternative reserve ( Petro-yuan?).... How would using treasuries get that done?

I don't agree that they would - I was clarifying some other comment someone made.

In the case of Russia they are seeking Rubles for their oil. Currently they receive Euros, Dollars and Sterlings for their oil. All oil transactions had been in those currencies and continue to be, likely in some form of credit swap. Futures contract for treasury swap - for instance. What was most likely happening, though I don't follow it too closely, is that Russia was dumping their USD denominated treasuries for something else. But, for whatever reason they probably didn't get to phsycially transfer them to Russia, most likely because these are securities swaps and don't actually exist.

US promised to deliver Russia dollars in exchange for oil.

Russia gave up the oil (physically) and now learned how much the US word of mouth is worth.

The whole world has learned what good it is...and that's a big threat to the US.