On February 13, Yemen's Houthi issued a statement saying that the group launched an attack on a U.S. ship sailing in the Red Sea and "hit the target accurately", saying that the attacked ship was named "Rainbow Star", and that the Houthis said that they would expand their targets in the Red Sea region to include all U.S. and British ships, and about 12% of the world's shipping passes through the Red Sea and the Suez Canal route, which has sparked Wall Street's concerns about the resurgence of the U.S. inflation beast, and the latest data is feeding back this trend.
Data released by the U.S. Department of Labor on February 13 showed that the overall CPI and core CPI in the United States in January were higher than expected, failing to return to the "2 era", the seasonally adjusted CPI annual rate in January recorded 3.1%, higher than the expected 2.9%, and the core CPI recorded an annual rate of 3.9%, exceeding the expected 3.7%, while the market reduced bets that the Federal Reserve will cut interest rates as early as May.
This suggests that gold, the dollar's biggest rival, will continue to boost and regain its kingly nature as the Fed hints at more dovish signals, as well as new evidence of continued escalation in the Red Sea and new evidence of growing risks following the surge in U.S. debt interest costs. This will become clearer as the efforts of many countries around the world to accelerate de-dollarization in the financial sector such as oil and digital currencies are reversing the supremacy of the dollar.
Because countries around the world have realized that the dollar has a shelf life, gold is the real money, and is de-dollarizing and selling U.S. bonds in exchange for non-dollar assets such as gold, it is clear that global central banks are increasingly aware of the need for real money in foreign reserve assets to hedge their exposure to U.S. bonds.
According to a report by the American financial website ZeroHedge on February 14, just more than 50 years after the United States excluded gold from the world monetary system, many people believe that gold's role in the global central bank monetary system has ended, and more and more Americans have withdrawn deposits from banks and began to rush to buy gold and hoard gold coins to deal with the risk of uncertainty.
As part of the details of the latest data chart released by the U.S. Mint on February 13, the sales of U.S. Eagle gold coins in 2023 will reach 1.458 million ounces, of which the total sales in the fourth quarter of last year will be as high as 456,800 ounces, an increase of 24% over the same period in 2022, and it is close to the sales of the whole year of 2020, continuing another strong performance after the sales of 1.35 million ounces in 2022 and 1.2 million ounces in 2021, to express doubts about the safety of the U.S. financial system.
The above incident in the gold market is a market signal that readers and friends need to pay attention to, which shows that in the United States in the environment of persistently high inflation and the US debt crisis may be detonated, Americans are beginning to doubt whether the dollar can continue to function as a long-term wealth store, and at the same time, global central banks are also allowing gold to play a greater role in international reserve assets and financial transactions.
Because the current macroeconomic environment in the United States is one of monetized debt, rising US Treasuries and persistently high inflation are not conducive to the value of the US dollar and its reserve currency status, and will have a long-term spillover effect on US Treasuries, which are the anchor of global asset prices.
While both the U.S. Treasury and the Federal Reserve believe they can control this process, the history of world currencies tells us that they can't, and the Fed can't print gold, and according to the latest warning from JPMorgan Chase & Co. in New York, the combination of "high debt, high interest rates, and low growth" is a poison for the U.S. economic and financial debt markets.
In this regard, as explained by the chairman of First Mining Gold in an industry report published on February 14, I am convinced that in a market environment of soaring US debt tsunami and ongoing regional conflicts, financial markets may be linked to gold when the world really needs to address the risk of a US debt deficit of more than $34 trillion.
This also seems to explain part of the reason why many central banks will accelerate the liquidation of US debt swaps for gold from 2022 and accelerate the return of gold from the United States to their own countries, because they may know what will happen to the world market in a few years, and the beauty and value of gold relative to the dollar and US Treasury is that it will never lose value or default.
For nearly half a century, people around the world have used to refer to the dollar as "US dollars", which reflects the credit value of the US dollar when it was strong, but when the United States no longer had enough gold reserves to support its gold standard in August 1971, it was suddenly announced to the world that it had unilaterally closed the window for the direct exchange of dollars for gold, which showed that the United States had essentially defaulted, and since then, the anchor object of US dollar issuance has changed from gold to US bonds, so that the US dollar has now lost 98% of its value relative to gold value.
Therefore, from this point alone, the decoupling of the dollar from gold itself shows that the value and credit of the dollar are being lost, which shows that the dollar has a shelf life, the dollar is not gold, the real gold is gold, and the reason why Americans can buy the world's cost-effective goods through printed dollar green paper and live a life like a drunken gold addict is based on the dollar's status as the world's main reserve currency.
The chairman of First Mining Gold further explained that as history shows, gold at this time may once again become a trust anchor basis for building a global digital currency system parallel to the US dollar, and at that time, the financial system may be pegged to gold, and it is clear that gold is no longer a marginal asset.
Then, according to the US financial website ZeroHedge reported on February 14 that Saudi Arabia will convert part of its oil revenues to the Chinese market into gold, rather than dollars and US bonds, and new information shows that Saudi Arabia may trade and buy gold directly in RMB on the Shanghai Gold Exchange in 2024.
This suggests that China is driving the renminbi's trading volume and pricing power in the global financial, oil and gold commodity sectors, and the lead of the digital yuan may accelerate the use of the digital yuan in the oil-producing countries of the Middle East.
At the same time, Iran is following Saudi Arabia's lead in creating a gold-pegged digital currency across the region as an alternative payment method for cross-border transactions that can be easily accepted by central banks around the world.
What's new is that, according to a February 13 report on the website of Iranian state television, Iran welcomed the introduction of a common currency program backed by gold in its international trade, stressing that the move would prove beneficial for Iran's de-dollarization.
What's new is that the chief banker of the central bank of Iran said on February 14 that the central bank of Iran is creating a digital reserve currency that can be accepted by central banks around the world, which will be pegged to gold as one of the alternatives in the de-dollarization process, and Iran said as early as July last year that it would support the BRICS countries to launch a financial system anchored to gold that can support cross-border settlements.
As a key part of bypassing the petrodollar, Iran's foreign exchange website said in a statement published on February 5 that it would play a greater role in Iran's oil trade activities, given that Iran has officially replaced the original dollar's foreign exchange position with the yuan, as well as the global leadership of the digital yuan and the increasing pricing power of the yuan in the Eurasian crude oil market.
According to the new news, since Chinese energy buyers used RMB to buy and settle the first order of Iranian oil in 2021, according to the data updated on February 11 by two world-renowned energy and shipping data analysis companies, Vortexa and Kpler, at least more than 11 million tons of Iranian oil have been shipped to China in the six months to January, and they are traded at a lower price than international oil prices, and are expected to continue to expand oil exports to China in the coming months.
According to Kpler estimates, China is one of the largest customers of Iranian oil, buying an average of 1.05 million barrels of Iranian oil per day in 2023, especially after Iran increases oil production and provides significant discounts, oil imports in 2024 are expected to maintain a significant increase.
Iran's crude oil and condensate exports averaged about 1.4 million barrels per day last year and the country's crude exports have hit their highest level since 2018 and the country is trying to send more oil to the Chinese market, the country's oil minister said Feb. 13.
The data shows that since the beginning of this year, the crude oil shipment volume of Iranian crude oil to the Chinese market has been continuously growing, and the surge in these oil export figures is due to the new changes in the export and settlement methods of the Iranian oil industry, which shows that the petroyuan has played a role as a petrocurrency in the settlement of oil transactions in the Middle East.
At the same time, it is reported that the new gold-backed currency scheme for trade settlements is planned to include the Shanghai Cooperation Organization and the Eurasian Economic Union, in addition to the BRICS member states. This explains partly why China is continuing to sell US bonds in the international reserve asset sector in exchange for gold.
This shows that the global market uses gold and digital currencies to break the petrodollar-based U.S. bond standard, and it also shows that the possibility of U.S. Treasury bonds, as a global textbook-like risk-free asset benchmark, is increasing relative to gold, and it is also prompting overseas U.S. bond creditors, including China, to accelerate the process of selling U.S. bonds, especially since the beginning of this year, the U.S. bond sell-off is led by U.S. economic allies, such as Japan, Belgium, Luxembourg, Germany, France, Israel and Saudi Arabia, which is unexpected by Wall Street。
In this regard, the world's leading research institute The McGill International published a report on February 14 that the new pattern in the global oil market and petrocurrency now seems to indicate that the petrodollar that has dominated for half a century may be weakened, and the death knell of the petrodollar has sounded, especially in the context of the continuous emergence of important landmark events of global de-dollarization and the continuous use of digital currencies to de-dollarize the centralized process.
As part of this strategy, Iran's central bank has officially launched a new currency exchange center a few weeks ago, and for the first time allows direct trading of gold in foreign currencies, including the renminbi and the euro. The latest data from Iranian customs shows that Iran's gold imports are increasing significantly in the two weeks to 9 February, with the head of the Iranian Trade Promotion Organization saying the country has imported about 7 tonnes of gold in the past few weeks. Iran's central bank said that promoting more gold in Iran is the most important goal of the center's establishment.
The above new news in the field of global oil, gold market, digital currency and petrocurrency seems to indicate that the petrodollar system that has dominated for half a century based on the "petro-dollar-U.S. debt" as the closed-loop basis has gone wrong, combined with Europe, Japan and Saudi Arabia, the party with the largest number of overseas dollars, and the Middle East oil-producing countries represented by Saudi Arabia, the party with the largest number of overseas dollars, are also setting off the background of de-dollarization, which shows that the unspoken rules of global oil trading of "no dollar, no oil" have been broken.
Then, the current global growing trend of digital currency, combined with gold's natural currency attributes, may support the emergence of a new global monetary order parallel to the US dollar, which may mark the birth of the post-Bretton Woods system and the twilight of the petrodollar analyzed by former Credit Suisse star analyst Zoltan Pozal, and this will be the next Pearl Harbor-style event for the petrodollar US bond system, which will become more clear in the context of the US Treasury is increasing the issuance of new US Treasury bonds to intensify the credit crunch in the US market, and the urgent need for global creditors to pay for it.
Against this backdrop, and amid heightened fears of a resurgence of the regional banking crisis and the increased risk of a U.S. debt default, U.S. Treasury Secretary Janet Yellen responded in a speech on February 13 that "the disruption of shipping due to the escalation of the situation in the Red Sea has not had a material impact on U.S. energy prices and inflation," and that "the dollar's reserve status is difficult to shake," stressing that "the U.S. dollar will continue to dominate as most countries will still use the U.S. dollar."
Earlier, U.S. Treasury Secretary Janet Yellen also responded to the threat to the dollar's reserve status when she testified before the House Financial Services Committee in Congress on February 10, "I am indeed worried about the U.S. banking crisis, at least one bank may fail, but I believe that the U.S. financial risk will be controllable, and the reason why the U.S. dollar is regarded as an asset is because of the depth and liquidity of the market, as well as the economic strength of the United States." (ENDS)