.png)
What’s up, fellow investors? I’m excited to kick off this week with some big news!
The Wall Street Journal headline: “Saudi Arabia Considers Accepting Yuan Instead of US Dollars for Chinese Oil Sales.”
Why is this such a big deal? Let’s review some history first.
History on USD
After WWII, the US was the only country left with a standing army or anything stable. They made a universal proposal to provide a protective navy to any country that agreed to trade in USD.
Everyone liked the idea of free protection and signed up! This is known as the Bretton Woods Agreement.
So, Saudi Arabia (along with the rest of the world) has been trading in USD since 1974, forcing every country to need the US Dollar. This makes it America’s most valuable export.
Additionally, the feds have been issuing debt to other countries, forcing them to pay back in USD!
Will They Make the Switch?
Taking this all in, if Saudi Arabia switches to Yuans, it will hurt America badly! They would revolt. Like I said in my video…
“I believe that the US would go to war over this. That’s how crucial trading in USD is to the US.”
Ever since Afghanistan, we have seen multiple countries try to pull away from this system.
The US has been a major ally to Saudi Arabia over the years. However, our governments do not have the best relations right now. What if they “leaked” this article just to test the waters?
Let’s say they actually go through with the China deal. What would happen?
“I believe that the US would put major sanctions on Saudi Arabian oil if they did this. The US would stop protecting them and probably hurt them.”
Like I said in my recent video, XRP and Ripple were shut down by the US (SEC) because it threatened the USD. We would see the same type of friction if Saudi Arabia did it.
Conclusion
Keep an eye on the fluctuating currency rates of the Yuan and stay tuned for other news!
Have a great day!
Want to get direct guidance for your fund? Schedule a time with my Fund Advisors!
DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the authors.
