• President Maduro ‘ Venezuela will create a basket of currencies to free us from the dollar,
  • Oil traders ordered to stop accepting U.S. dollar in exchange for crude oil
  • Order comes following calls from Russia and China to find alternatives to current reserve system
  • U.S. Dollar accounts for two-thirds of global trade
  • Venezuela has over ten-times more oil than United States
  • Super powers are gradually turning to gold to avoid using world’s main reserve currency
  • Are we seeing the beginning of the end for the U.S. dollar?

Source: The Burning Platform

The oil-rich country of Venezuela has stopped accepting the U.S. Dollar as payment for oil.

Last week President Maduro warned that the country would this week ‘free’ itself from the US dollar.

Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,

Yesterday Venezuelatemporarily suspended the sale of U.S. dollars through its Dicom auction system. This (and other moves) was in response to U.S. sanctions put in place by the Trump administration.

Trump claims the sanctions are there to punish the country’s autocratic leaders. Maduro claims Washington’s move waspart of an economic war.

This morningThe Wall Street Journalreports that the Venezuelais already telling oil traders not to accept the US currency.

Oil traders who export Venezuelan crude or import oil products into the country have begun converting their invoices to euros.

The state oil company Petrleos de Venezuela SA, known as PdVSA, has told its private joint venture partners to open accounts in euros and to convert existing cash holdings into Europe’s main currency, said one project partner.

The decision to suspend dollar trading on Diacom and to no longer accept the the U.S. currency for oil is potentially a major blow for the world’s reserve currency.

Venezuela’s decision comes at a time when other countries (namely Russia and China) are already finding ways to avoid using the U.S. dollar.

History shows us that currency dominationdoes not last forever. Are we seeing the cracks in the latest global currency reserve system? Will those who seek to come out of the shadows and force of the US begin to build up their own systems to survive outside of the U.S. dollar and how important will gold be?

How important is oil to Venezuela

According to OPEC oil accounts for 95% of Venezuela’s exports. The country has ten times more oil reserves than the US, and nearly 70 billion more barrels than Saudi Arabia.

However, because of its heavy reliance on oil as an export this means it is heavily reliant on the price. Since President Maduro came to power the oil price has crashed. Inflation is out of control and the bolivar is practically worthless:$1,000 of local currency bought in 2013 would today be worth $1.20.

The Trump administration has made it clear that it will achieve aregime change through the destruction of what is analready severely debilitated Venezuelan economy. Prior to the latest round of sanctions one could see a way out for Venezuela but not anymore.

It isclear that Venezuela will have to seek outside help in order to survive. That help will no doubt come from the other countries that are fed-up of or suffering as a result of U.S. dollar hegemony.

China is set tolaunch a crude oil futures contract priced in yuan and convertible into gold. This will give the likes of Russia and Iran a means of bypassing both the U.S. Dollar and sanctions. Now, it may also be an option for the world’s largest oil producer.

By making this convertible into gold it means countries are no longer held hostage by foreign currencies. Gold is a borderless currency which speaks everyone’s language.

Liberate us from the U.S. dollar

The new policy on oil payments has not been officially announced but it comes less than a week after both President Maduro and Vice President Tareck El Aissami called for liberation from the US dollar.

El Aissami (blacklisted by the US) has called for other sovereign currencies to be used. On Friday he said, To fight against the economic blockade there will be a basket of currencies to liberate us from the dollar.

In an hour-long address to a new legislative body last week, President Maduro said, If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,

As mentioned in the introduction super-powers such as China and Russia are keen for countries such as Venezuela to join them in avoiding the U.S. dollar.

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