Another Loss for the US: Japan Breaks with Western Allies, Buys Russian Oil at Prices Above Cap

Maybe they just needed an "I" to make it a cool acronym, and Indonesia didnt return their calls

 

It bypasses swift and central banks all together and allows nations to purchase / sell oil without having to convert to USD.

 

It reduces financial or geopolitical leverage the US may have but I don’t know if any material economic impacts it would have.

 

It is simple. If countries don't need to keep dollars in their reserves to buy oil, then where do the dollars they currently keep in their reserves go? Well, those dollars come home. If they come home, then the domestic money supply goes up. And if the domestic money supply goes up, then that will cause inflation. If most of the world's dollars in reserves come home, then your dollar isn't going to be worth as much as it used to be. If the demand for dollars goes down, then so does its value. That is the bottom line.

 

Totally different situation.
Trump asked them to cut production when the price of oil was like $20 a barrel, our producers were getting killed and loosing billions. Many drillers were going to go under.
That was done to save American jobs. Totally reverse situation currently.

Not sure how that’s traitorous.

Trump also wanted to buy cheap oil and flush the SPR when it was dirt cheap. If I remember correctly congress refused to approve the purchase. Great ROI it would have been had been full at $20/barrel when we’re releasing it at $100/barrel. Instead Biden was gonna buy it to help refill the SPR at $70/ barrel. Sad

Biden tried to get OPEC to increase production to lower the price and OPEC turned him down, so much winning there..

 

Congratulations!! You’ve successfully hijacked a thread about a key ally bucking our sanctions and paying blood money to Putin for oil with a very elementary question about economics. Kudos to you, Biden lackey. You don’t have to be an economics major to understand that greater usage of the US dollar worldwide props up the value of the US dollar. The more demand for dollars, the higher the value. Your dollar goes further when more countries use the dollar, because their demand increases the value of the dollars in your wallet. Jesus H. Could you imagine what our inflation would have been like with a weak dollar?

So I am sure that’s not a good enough explanation for you and you’ll continue to obfuscate the OP, because you don’t want to address the OP. Perhaps you can explain to me why Japan buying oil from Russia is a good thing, regardless of the f’n currency they’re using?? Above cap, no less. Whether they use dollar or they use yen, how in the mother**** is that a good thing?? I’ll hang up and listen, Biden slurper.

 

Trump left office with the reduced deal in place. It’s not a different time. It’s the same OPEC agreement. Trump had the US producing less and OPEC producing less. What do you think happened to prove when you put that together? What about oil profits? Under Biden oil production is at historic highs.

 

And you completely ignore the Macro demand from Covid ending and the world reopening. Global demand shot up.
Trump left office in Jan of 2021. Not to mention Ukraine being invaded and the Russia oil “blockade”.

Trump didn’t “have the US producing less” the demand for oil crashed. Hell there was a point when it cost more to store than to buy it for that’s why the futures went negative. Producers typically cut production when demand drops.
Demand is fueling the increased US production not something Biden did .
Profits have risen because the cost of production has been largely static and the demand has gone through the roof thus higher prices and higher profits.
Really quite simple.

 

I really dont understand. I am pretty sure that the President is 100% responsible for gas prices and oil production. Heck, were you not the one arguing early last year that oil futures were affected by Biden's speeches costing us higher gas prices? Im like 22% sure that was you.

 

By the tone of your response I must have put you in a box. It seems that you, like most other right wing conspiracists, take it as a fact that the US not being reserve currency will lead to inflation or other bad things. I’m just asking how logically that happens.

Why am I asking, because I’m pretty sure it isn’t true. Can you provide any evidence that it keeps down our inflation? EU countries, Japan, Australia and the UK all didn’t have inflation prior to Covid/Ukraine, most of low interest rates, and some like the UK and Australia have large trade deficits.

I posted a Krugman article where he explains why it shouldnt make much difference. When the world transitioned from the British pound to the US dollar the UK didn’t have rampant inflation.

It may very well be that the dollar is somewhat higher due to it being reserve currency. Or it may be that the dollar is higher because it is more economically and geopolitically stable. Or it could be both.

The percentage of US dollars in the world has been slowly decreasing for many years. Did that lead to inflation? No. It will continue to likely decline slowly over the years.

You clearly can’t explain the mechanism how inflation will supposedly come about. That’s because it doesn’t exist. I can think of no reason why countries trading oil based on the dollar vs some other currency makes a material economic difference.

The fact that you can’t explain and resorted to insults shows you feel cornered. People are more likely to reality to insults and personal attacks when they don’t understand the issue.

 

Ok at least you attempted to answer the question, and gave the standard answer. Here are the issues with what you said

1. Just because the share of dollars is slowly decreasing, it doesn’t mean actually dollars are decreasing. The world economy continues to grow. So dollar quantity can grow or be stable and slowly become a smaller share of the world currency.

2. The currency supply can be managed to a degree. It doesn’t necessarily follow that there’s bunches of excess currency that will flood the US market. Supply will adjust to demand.

I’m not saying it will be no effect, I’m just saying that it will be gradual the economy will adjust.

 

It does more than that. As other nations sign on to the alternative it reduces US influence. Nations that are now beholden to the US due to financial blackmail and sanctions no longer need to comply with US foreign policies that have a major impact on their own economic well being. No longer will nations be cut off from the international banking system. SWIFT will have to adapt to a new order of financial markets.

It is unfortunate you didn't read the entire paper that I posted as it will answer the questions you have in a much more succinct manner than I can. Couple that paper with what is currently happening today and the implications of the China's Belt and Road initiative the path of a new global economy becomes clear. Add to that path Central Banking Digital Currency that negates the necessity of the IMF with special drawing rights and the world of import/export as we know it is turned on it's head.

In the long run a new era is upon us whether we want to acknowledge it or not. We will all be dragged into it no matter how much we kick and scream. That said it is much better to prepare for it than it is to fight it.

 

In other words, you’ve hijacked the thread, because the OP put you in a box and you’re not sorry about it. Gotcha. If you want to start a new topic about the value of the dollar and its value being tied or not tied to the amount of its use worldwide, I am sure many of us would gladly chime in.

You’re too obviously working to steer another Biden foreign policy blunder and the implications for Ukraine into a totally different discussion. A major economic behemoth and supposed staunch ally of the US has decided to buy Russian oil at above cap prices. Our sanctions have been rendered largely useless and ineffective as a deterrent against Russian aggression.

 

Poster makes a mountain out of a molehill since 1) the amount of oil is negligible 2) The US signed off on it, and 3) It corresponds to the by-product oil produced in a natural gas project Japan has developed with Russia for years. Contrary to poster's hopes, it does not exhibit a significant break with the US and Allied coalition of sanctions against a war-mongering sovereign territory grabbing Russia. So how 'bout those feisty Finns going all NATO on Putin? Great plan.

 

LOL @ the cognitive dissonance. So, if any allies had pre-existing projects with Russia prior to the war, we should just let them carry on business as usual? Sort of defeats the purpose of cajoling Europe to stop buying the product last year.

 

He seems to take delight when he can relay something that would be considered bad news for the US. Absolutely pathetic, bordering on traitorous.

 

It has everything to do with Trump. He negotiated the surrender.

Do you even know who the equipment we left behind belonged to? Obviously not.

 

Can poster say : strawman? Why not address the exact instance involved rather than "So, if any allies had pre-existing projects with Russia prior to the war, we should just let them carry on business as usual?" Being intellectually disingenuous does not benefit your position. So all those allies sending armament to support Ukraine doesn't matter since Japan negotiated a small carve-out. Must mean those Russian casualties are not serious as well. Be better. Sigh