A Petrodollar For Your Thoughts

With greater “macro factors” affecting the U.S Dollar, it becomes increasingly more difficult day to day to project it’s movement, or at least via the usual correlations.

A Petrodollar is a United States dollar earned by a country through the sale of its petroleum (oil) to another country

Trade agreement put in place world wide “circumventing exchange in USD” being the largest over riding factor with China now trading with the Brits, Russians, Swiss, Australians, Mexicans, And even the European Union – outside the use of American Dollars.

I believe the list of countries now trading with China “outside the use of USD” is now upward of 23 – 25 deep. For the life of me I can’t locate the list on the Internet.

If you can even fathom the loss of revenue to the United States when you consider that “previously” every single transaction between these countries “included” use and exchange of U.S Dollars – the picture begins to take shape.

A tremendous loss, and most certainly not a popular news story on American television, being completely outside the usual day-to-day facade/sham of the “recovering” U.S economy.

I guess if you ran a business of your own, it would be kind of like telling your staff “everything is fine” there at your physical location – having just found out you’ve lost your top 25 wholesale accounts. Keep smiling, and keep your local clients happy as…..they don’t really need to know “about that”. Until of course the “going out of business sign” is hanging in the window.

I imagine by the time we catch wind of “more and more oil trade occurring via the Middle East” and that trade being “outside the U.S Dollar” we’ll also be hearing of the next war the U.S will be instigating in order to squash the deal, with the sole intention of saving the “petrodollar”.

I’m getting smoked on my first few entries ( again a touch early ) long USD as markets are doing all they can to “take in the money”. The US Dollar has “swung low” and along with that has also been volatile / taking out trades. I remain long USD and will just be looking to add on any further weakness moving into the Fed meeting announcement tomorrow afternoon. In this case “please don’t prove me right” and “pull the tapering just yet” ( before it’s even begun ) or I’ll dump these trades in a heartbeat.



17 Responses

  1. Careydina January 28, 2014 / 8:26 am

    Hi Kong,

    I’ve been so busy for CNY. I have no any positions now. If US QE cutting down, it will strengthen the use. I see long usd too. May short gbp/usd, but again unlikely will break 1.64. How you think about it?

    • Forex Kong January 28, 2014 / 8:36 am

      I am waiting on entry short EUR/USD, GBP/USD as well long USD/CHF yes….all likely tomorrow after Fed.

      That being “if” they stick with the “taper talk”.

      I can honestly say…….having the Fed involved to this extent has one questioning every single one of these stupid meetings / announcements and has made “trading medium term” near impossible.

      I can’t imagine they will roll over this soon…..but can certainly imagine some kind of “language” aimed at further confusion.

      I’m sticking long USD “hard” – short of Fed “ending tapering” before it’s even started.

      • Careydina January 28, 2014 / 9:26 am

        Thinking to short before the FED haha… gbp/usd D1 chart is showing short to me. Well.. never know… FED is coming soon, everything can be possible 😉

  2. Farhan Nasir (@FaniNasir) January 28, 2014 / 11:30 am

    they are Fed , one cant expect the unexpected from them as they have proven everyone wrong with the unexpected countless time ,, but still hope that they dont back out of tapering this soon cos this will end the little trust people have in them .. fingers crossed ,,

    • Forex Kong January 28, 2014 / 12:13 pm

      It’s interesting that “the very establishment” supposedly responsibe ( along with the government ) for the management and “recovery” of the U.S economy – is the same group looking to screw investors / manipulate at every turn.

      Let’s seriously imagine if they “do indeed” pull the taper before it’s even started…wow – what a complete and total gong show. (USD down)

      Then let’s imagine they “continue/ commit” and extend / further the idea that the “party is essentially over” (USD up)

      • Farhan Nasir (@FaniNasir) January 28, 2014 / 12:26 pm

        that’s the thing about Fed they only do what’s best for them not for the economy or the people ,, been reading on different sites that more than 90 % people are saying that they are gonna taper and i dont think they are gonna piss off this many people , all that we can do is wait and watch cos anything can happen when comes to Fed ,,

        • Forex Kong January 28, 2014 / 12:33 pm

          You are starting to sound like a pro Farhan!

          I love it, as you’ve just said something that I know for fact reflects your improvement with your forex trading….

          “all that we can do is wait”……….spoken like a pro.

      • JSkogs January 28, 2014 / 12:26 pm

        Every time I get close to pulling the trigger on a USD trade many of these aforementioned thoughts come to light……and then I don’t complete the order HAHA…..USD is a potential landmine to me.

  3. schmederling January 28, 2014 / 1:44 pm

    When 90% of people are thinking the same thing – more often then not the reverse happens…..

  4. schmederling January 28, 2014 / 4:25 pm

    I’d like to see the US raise rates to 12% and see what happens…. LOL this is going to have ripple WAVES across the board!!

  5. JSkogs January 28, 2014 / 4:28 pm

    I had no idea that Turkey mattered so much and that rates at 12 percent were so awesome for the general market. SPX futures jumped 6 points on the rate hike news.

    • schmederling January 28, 2014 / 6:47 pm

      Personally I think it’s a short-term reaction….. I don’t think their economy will be able to handle it but with their currency falling off a cliff what does one do? Feel the pain now before it gets worse – it’s the right move & just a small test as the US will have to follow suite eventually along with the rest of the globe….. this is the pain the US has been avoiding since 08 – they are pulling a P Volker here…… I don’t think this will be the last we here of rate hikes …. they will start in the EM & then hit home sooner or later!

      Cheers Schmed,

  6. Kalahari January 28, 2014 / 5:12 pm

    Hey Kong just wondering what Turkey’s massive rate hike means in the context of things. Still trying to get my around it. Does that mean risk on

    • Kalahari January 28, 2014 / 5:28 pm

      Right get it now they’re basically defending their currency but killing growth. Could that mean that more fed taper could see risk rise rise ahead of an expected domino rate hike effect.

  7. schmederling January 28, 2014 / 6:54 pm

    The same will happen in the US once the DXY starts it’s collapse….. rates will go up there is no other option…. The pain has been avoided for 5 years now….. will they kick the can further maybe…. but it will happen when the currency goes….. this is just a preview of what is to come across the board IMO….. non will be unaffected…. one of the BRIKS will be next…. brazil, Argentina….. then Europe & finally North America….. again just IMO…

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