According to a recent report by Indy Media, Mexican crude oil will be sold to China without using the US dollar as its trading currency. Sources inside the Mexican government refuse to disclose if they have been in secret negotiations with China over possible crude oil sales.
If you’re not familiar with the term petrodollar, or why a move such as this by China, Mexico, or Russia is of grave concern, allow me to give you a few points to consider and explain the situation –
In 1975, the members of OPEC agreed to sell oil only in US dollars. This was for a variety of reasons, but chief among them was to maintain a need for US currency and maintain its reign as the global reserve. Without this in America’s backpocket, I’m sure that the Dollar would have even less value, to put it mildly.
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Greenspan, in his first speech after leaving as Chairman of the Fed, said that gold prices were up because of concern about terrorism, and not because of monetary concerns or because he created too many dollars during his tenure.