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China Sells Western Currency & Oil Assets To Avoid Sanctions, Buying Gold


China Sells Western Currency and Oil Assets to Avoid Sanctions
April 16, 2022

China is shifting its global asset portfolio in response to sanctions on Russia and is in the process of stabbing the West in the back.
 Having seen the avalanche of economic pain imposed by the West on Russia—from the confiscation of oligarch yachts to the freezing of most of Moscow’s S$630 billion  in foreign currency reserves... China’s central bank had $3.22 trillion in foreign currency reserves  and $1.12 trillion in gold reserves in January...   It now realizes that much of this, which is in the world’s hardest  currencies—the U.S. dollar, euro, Japanese yen, and British pound  sterling—are vulnerable to freezing... By March, China’s currency reserves fell to $3.19 trillion, and its gold reserves rose to $1.22 trillion. In other words, China is selling  its Western currencies for gold.

Yesterday's currencies are being replaced and devalued
 China’s likely dumping of Western currencies could be adding to inflationary pressures in the West... U.S. inflation, the  Federal Reserve target for which is 2 percent, is currently at its  highest since the 1980s. In March, euro-zone and British inflation were also high at 7.5 percent. Meanwhile, in China, inflation is relatively moderate at 1.5 percent. Beijing knows that its global asset portfolio, including oil fields  in the West, could be seized if it follows Moscow’s example and does  the wrong thing. Rather than protect all these investments by doing the  right thing, the Chinese Communist Party is liquidating its vulnerable Western assets, and rebalancing its portfolio toward countries in which it has more influence, such as in the developing world and among dictatorships.

China and Russia both have large gold reserves.  The US  is left with it's future at stake in US dollars.
 China is selling its oil fields in  the United States, Canada, and Britain due to the threat of sanctions. CNOOC, China’s leading offshore hydrocarbon producer, seeks to unravel its $15 billion investment in Canada’s Nexen, which produces approximately 220,000 barrels per day in the North Sea, Gulf of Mexico, and Canada’s oil sands. The  timing of CNOOC’s asset sale appears to be linked to a rise in oil and  gas prices that resulted from Russia’s invasion of Ukraine, and which  could garner a higher price than it paid. Beijing still seeks to source hydrocarbons internationally and, to  that end, wants to acquire alternatives in places like Brazil, Guyana,  Uganda, and Iraq. A new aversion to Western assets, including currencies and  alternatives like oil fields, could have major ramifications for China’s  trade with the West. If China no longer wants what America, Europe, and  Japan have to offer, then Beijing might reorient away from supplying  these regions with manufactured goods, which would accelerate  decoupling.
China Sells Western Currency and Oil Assets to Avoid Sanctions


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