Oh yeah the framing is hilarious, but the significance here is huge. What this comes down to is that companies and countries have to choose whom to do business with. Do they respect US sanctions or Chinese ones. And since China is a far more important trade partner for majority of the world, it’s pretty easy to guess which way most will swing. On top of that, as the article points out, we’re going to see more dedollarization as a result since the easiest thing to do will be to just transact in yuan and make it opaque for the US.
Yep. Why would an oil refinery choose to stop accepting Iranian oil just to maintain the good graces of the US? This is probably just another, but very significant, test balloon in the march towards dedollarization.
I get the impression that Americans are still acting on the assumptions of being the indispensable economy and controlling the global financial system. But that’s no longer the case, and the only economic power the US has nowadays is being a large consumer market. However, as it goes into a recession the consumption drops which removes the only leverage the US still had.
Oh yeah the framing is hilarious, but the significance here is huge. What this comes down to is that companies and countries have to choose whom to do business with. Do they respect US sanctions or Chinese ones. And since China is a far more important trade partner for majority of the world, it’s pretty easy to guess which way most will swing. On top of that, as the article points out, we’re going to see more dedollarization as a result since the easiest thing to do will be to just transact in yuan and make it opaque for the US.
Yep. Why would an oil refinery choose to stop accepting Iranian oil just to maintain the good graces of the US? This is probably just another, but very significant, test balloon in the march towards dedollarization.
I get the impression that Americans are still acting on the assumptions of being the indispensable economy and controlling the global financial system. But that’s no longer the case, and the only economic power the US has nowadays is being a large consumer market. However, as it goes into a recession the consumption drops which removes the only leverage the US still had.