YUAN RISES AS THE US$ FALLS A Changing World Order

65,000 tonnes of LNG imported from the UAE changed hands

TotalEnergies confirmed to Reuters that the transaction involved LNG imported from the UAE but did not comment further.

Russia has increasingly embraced the yuan amid Western sanctions.

During a visit to the Saudi capital Riyadh in December President Xi Jinping announced that China would “make full use” of the Shanghai exchange as a platform to carry out yuan settlements of oil and gas trades.

Andrew Hayley for Reuters

THE COLLAPSE OF THE PETRODOLLAR

The information below comes from the book Principals for Dealing with a Changing World Order by Ray Dalio. The book is a macro-overview of previous empires that held global reserve currencies and what led to their downfalls.

The following link contains all of the graphs that are shown below: https://www.economicprinciples.org/DalioChangingWorldOrderCharts.pdf

A CHANGING WORLD ORDER BY Ray Dalio

There are three important cycles to analyse:

1. Long-Term Debt and Capital Markets Cycle; good and bad finances (e.g., the long-term debt and capital-markets cycle).
2. Internal Order and Disorder Cycle; due to degrees of cooperation and fighting over wealth and power largely caused by wealth and value gaps.
3. External Order and Disorder Cycle; due to degrees of the competitiveness of existing powers in fighting for wealth and power.

The archetypical big cycle:

1. The rise: a period of building. When a country has a)low levels of indebtedness, b) small wealth, values, and political gaps between people, c) people working effectively together to produce prosperity, d) good education and infrastructure, e) strong and capable leadership, f) a peaceful world order that is guided by one or more dominant world powers, which leads to…
2. The top: a period of excesses taking the form of a) high level of indebtedness, b) large wealth, values, and political gaps, c) declining education and infrastructure, d) conflicts between different classes of people within countries, e) struggles between countries as overextended empires are challenged by emerging rivals which leads too…
3. The decline: a period of fighting and restructuring that leads to great conflicts and greater changes and the establishment of new internal and external orders, setting the stage for the next new order
4. New world order led by the new global superpower(s)

From legendary investor Ray Dalio, author of the international bestseller Principles, who has spent half a century studying global economies and markets, Principles for Dealing with the Changing World Order examines history’s most turbulent economic and political periods to reveal why the times ahead will likely be radically different from those we’ve experienced in our lifetimes – but similar to those that have happened many times before.

A few years ago, Ray Dalio noticed a confluence of political and economic conditions he hadn’t encountered before. They included huge debts and zero or near-zero interest rates that led to massive printing of money in the world’s three major reserve currencies; big political and social conflicts within countries, especially the US, due to the largest wealth, political and values disparities in more than 100 years; and the rising of a world power (China) to challenge the existing world power (US) and the existing world order. The last time that this confluence occurred was between 1930 and 1945. This realisation sent Dalio on a search for the repeating patterns and cause/effect relationships underlying all major changes in wealth and power over the last 500 years.

In this remarkable and timely addition to his Principles series, Dalio brings readers along for his study of the major empires – including the Dutch, the British and the American – putting into perspective the ‘Big Cycle’ that has driven the successes and failures of all the world’s major countries throughout history.

Dalio reveals the timeless and universal forces behind these shifts and uses them to look into the future, offering practical principles for positioning oneself for what’s ahead.