Eoin Treacy's view -
As further sanction, the United States has removed Iran from the SWIFT network, the well-known world interbank transfer system, which is also a private company.
Iran, however, has immediately joined the Chinese CIPS, a recent network, similar to SWIFT, with which it is already fully connected.
Basically China’s idea is to create an international currency based on the IMF’s Special Drawing Rights and freely expendable on world markets, in lieu of the US dollar, so as to avoid “the dangerous fluctuations stemming from the US currency and the uncertainties on its real value “- just to quote the Governor of the Chinese central bank, Zhou Xiaochuan, who will soon be replaced by Yi Gang.
In the meantime, Russia and China are acquiring significant amounts of gold.
In recent years China has bought gold to the tune of at least 1842.6 tons, but the international index could be distorted, as many transactions on the Shanghai Gold Exchange are Over the Counter (OTC) and hence are not reported.
Again according to official data, so far Russia is supposed to have reached 1857.7 tons.
Both countries have so far bought 10% of the gold available in the world.
Meanwhile, Saudi Arabia has already accepted payments in yuan for the oil sold to China, which is its largest customer. This is a turning point. If Saudi Arabia gives in, sooner or later all OPEC countries will follow suit.
I find these arguments about the petrodollar to be very interesting. The establishment of the Dollar’s dominance in global trade was a masterstroke of diplomacy when the Saudi Arabians agreed to exchange Dollars for investment opportunities and military security. However, that was also at a time when the importance of oil to the global economy was growing.
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