India is not USA, given the advantage of being allowed
by the oil producers to price oil in US$. That move by the USA forced
all countries to accumulate US$ for purchase of oil and gives the USA
the privilege of printing unlimited piles of toilet papers that the
world needs to hold. The importance of oil today shows how big an effect
that arrangement has benefited the USA for five decades. It is however
ending, with Saudi Arabia ending the 50- year pact with the USA and now
pricing its oil in other currencies as well.
Knowing the US$
hegemony is ending sooner or later, the USA is spending like no tomorrow
and printing toilet papers furiously, making hay while the sun shines.
But as demand for treasuries are falling to enable the Fed to print at
will, it is reported by some sources, not officially of course, that the
USA Treasury itself had stealthily been forced to buy back its own
treasuries. That is how bad the situation is. Janet Yellen can yell
until she loses her voice, but not many are listening and buying
treasuries. The two top foreign buyers, China and Japan, have been
selling treasuries instead of buying. Even the Fed is not buying.
With
Japan fighting a furious battle to prop up the Yen, the indications are
that Japan will have to sell off the bulk of its treasury holdings,
which will cause Janet Yellen coming out to warn Japan strongly again
not to go overboard, with threats of consequences as usual. Japan is now
caught between a rock and a hard place. Japan is paralyzed, impotent,
and sliding further into oblivion. Revised data showed that Japan's
economy slid further with a 2.9% contraction in the first quarter of
2024.
India could follow the USA by insisting that its most
valuable export, which are CECA workers, be paid in Rupees to create a
demand for Rupees. Singapore, Japan and others can then accumulate more
Rupees to pay Indian workers, LOL. Japan ought to accumulate more rupees
instead as the Yen is doing even worse than the Rupee.
Anonymous
India wants to make the rupee more acceptable but does not have the industrial capacity to do it, only just making loud noises that failed to convince other countries to accept rupees in trade.
ReplyDeleteCountries will accept payments in rupees if India can provide goods that can be exchanged with those countries holding rupees for trade. Using coercion is not the way to go.
India tried to force Russia's hand with some Indian oil refiners refusing Russian oil, but that means paying more which is committing suicide. Russia is not ruffled and knows that India is only playing musical chairs just for show.
Russia can always sell highly discounted oil to China, helping China's manufacturing to lower costs even more and producing even more competitive products for the world. The USA and the EU can talk about subsidies from the Chinese Government when they themselves are subsidizing its own chip manufacturers with billions. The pot cannot call the kettle black. It is a shameful excuse.