On Oct. 28, Russian President Vladimir Putin spoke at the Fuel and Energy Presidential Commission and re-emphasized his stance on the petro-dollar system, and the need to ensure its end for oil and other energy purchases. This continuing admonition of dollar hegemony comes as Putin’s administration has already submitted a bill to the Duma calling for an end of dollar based energy sales within CIS nations, especaially as U.S. imposed sanctions edge towards their third year.
In addition to oil and energy sales, Putin also pointed out that it is the focus and mission of Russia to eventually end all use of the dollar in international trade where it is not needed outside of direct trade with the U.S. itself.
Russian President Vladimir Putin blasted the government for turning a blind eye on US dollar payments in the domestic oil trade.
“I would like to mention one crucial issue in the development of the energy industry, and the economy as a whole. It is a question of finally stopping the use of foreign currency in internal trade,” said Putin at the fuel and energy presidential commission on Tuesday.
Putin posed the question to the Russian Finance Minister.
“Mr. Siluanov, aren’t settlements in foreign currencies prohibited by [Russian] law? And what do we have in practice? Fees for shipment of oil products and crude oil in the Russian ports of Novorossiisk, Taman, Ust-Luga, Kozmino, Primorsk and others – are either directly priced in US dollars, or denominated in US dollars on online trading systems, practically in real time,” asked the President.
Putin also stressed the importance of not using the US dollar in international trade, a goal that has been on the Kremlin’s agenda since the deterioration of relations with the US over Ukraine. - Russia Today
Over the past two years, Russia, China, and the BRICS coalition have built alternate and competing infrastructures to challenge the hegemony of the dollar and the polar reserve currency. And with China now willing to sell oil to the world in Yuan instead of dollars, and a new alternative to SWIFT (CIPS) functional in the East, the potential of the world moving away from the dollar without the need for a new Bretton Woods is now greater than ever.
Over time America has used the dollar and its position as the reserve currency as an economic weapon, locking out nations like Iran and Russia from being allowed to fully function in the global financial system. And just as the U.S. has nearly destroyed the dollar’s stability by increasing the currency by tens of trillions via quantitative easing, major economies like Russia and China are setting the stage for the end of the petro-dollar system, and the integration of a new platform that eliminates global reserve requirements althogether.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.