One of the common themes in current world economics is the decline of the US petrodollar. For those who’ve been sleeping under a rock since the 70’s, the US made agreements with the Middle East — way back when — to have all oil trading done in US Dollars. This created a huge demand for US Dollars around the world, driving the USD to world domination.
In a nutshell, of course. History teaches us that no world conqueror reigns forever, and it looks like the clock is ticking for the petrodollar. China already trades in Chinese Yuan (CNY) with several other countries, with the promise that the CNY is backed by gold. While China has a large stockpile of gold – officially the sixth largest in the world – the amount they claim isn’t really enough to unseat the USD as the world’s top currency.
But they certainly have enough gold to back up their international trading. The question is Do they actually have more than they claim? And can they “weaponize” it, to use a pop media term?
Today we feature a video interview with Alasdair Macleod, head of research for GoldMoney.com, who gives his view on how the balance is evolving.