What will happen to the US dollar if China starts buying oil in yuan?
Answered by: Sylvain Saurel,former https://sylvainsaurel.substack.com/
If oil were priced in Chinese yuan instead of the US dollar, it would be a real disaster for the United States.
The fact that oil is priced in U.S. dollars reinforces the U.S. dollar's status as the world's reserve currency.
With this status as a world reserve currency, Americans have an exorbitant privilege. It is the rest of the world that pays for America's standard of living and the success of its multinational corporations.
The United States cannot afford this eventuality.
It will be prepared to do anything, even use military force, to prevent this from happening one day.
China has clearly understood what it must do to achieve its goal of becoming the world's leading power by 2030: it must break the US dollar's monopoly on the world.
Its e-RMB project fits perfectly into this framework. China wants to take the battle to a new playing field where it can have the first-mover advantage .
China could sign a strategic agreement with Iran at the beginning of 2021. This agreement concerns an investment of 400 billion dollars over 25 years.
China would have privileged access to Iranian oil and gas, which would be priced in Chinese yuan. It would be the beginning of a new world.
Of course, as long as Saudi Arabia sells its oil in U.S. dollars, the United States has nothing to worry about. Nevertheless, beware, this is the beginning of difficult years for the United States.
The cold war that is beginning between China and the United States also has this at stake.