Yuritopiaposadism [none/use name]
politicshttps://archive.is/2026.04.20-025139/https://www.wsj.com/world/middle-east/u-a-e-asks-u-s-for-a-wartime-financial-lifeline-3f9ea3a0
China has a gazillion US dollars. I don't understand why the UAE would be forced to sell in yuan. The UAE are the ones receiving currency in an oil trade. Why do they need liquid dollars? I am not a finance bro
Closure of the Strait is costing hundreds of millions per day. They can use the Strait if they sell in Yuan, they can't use the Strait if they sell in dollars.
The petrodollar agreement between the middle east states and the US is basically a protection racket, the US "protects" them (by not doing regime change) in exchange for those states agreeing to sell their oil using dollars. This is the foundation of what made the dollar into the international reserve currency and the primary currency used for all trade, because the dollar was secured against oil, the petrodollar.
It is the backbone of the dollar's value and stability.
Slight correction. WW2 was what made the dollar into the global reserve currency. The petrodollar is what allowed the value of the dollar to remain despite them dropping the gold standard.
Going to the bank and announcing that unfortunately I will be forced to poop in the lobby if I am not supplied with enough dollars
Give me money or I'll go to the other bank who absolutely will
Really don't see how that'll solve their problem which is that their currency peg is under pressure? Unless China provides their own currency swap arrangement or loan to UAE.
Devaluation must be really scary thing for them considering how long they've held their $1=3.67 Dirham parity. Everyone has planned and expected that rate. Abandoning it is much riskier for UAE than some settlement being done in Yuan for the US.
That said, UAE has trillions in Dollar denominated assets in their SWF, just that it's mostly in illiquid assets seeking higher returns.
I think it's more about liquidity and credibility than actual "UAE being broke" issue. Credibility also matters, if UAE starts selling assets to maintain peg, it'll create speculative pressure which will further increase outflows. A currency swap arrangement is generally good market optics.
I think it's more about liquidity and credibility than actual "UAE being broke" issue.
That's still very problematic isn't it? They aren't broke per-se but if they can pay for imports by exporting in Yuan, that saves them from currency pressures like a sudden shortfall comprised of their entire export balance.
It's the UAE. Their policy is to take the most evil position and then fail. This means asking for dollars from the Empire, which is in its interest to provide, and then fail to secure even a loan from imperial institutions.
Issue is trade is only a small component of balancing international payments. UAE has no capital controls, so anyone can swap Dirham for Dollar freely, and their Central Bank must defend the rate they set. It's basically a money laundering haven so...
I would expand the third point is even more complicated and it's not just independent monetary policy but also independent fiscal policy you have to give up. At the extreme, no matter how high the interest rate is, a peg cannot be defended without running out of reserves. Basically you cannot:
- Provide absolute promise to provide a fixed rate for converting local currency to another. (fixed exchange rates)
- Provide convertibility in unlimited amounts. (no capital controls)
- Issue local currency beyond the amount of foreign currency you hold, or allow private banks to issue local currency freely convertible to Government money (which is in turn convertible to foreign currency).
All at once. UAE does so because its reserves are so large attacking the peg is very difficult and usually impractical but mechanically the peg is breakable, even currency boards like Hong Kong are (they only back base money, not all money).
I think they're trying to end the war because they want their ships to go through the strait and raising this is pretty much the scariest thing the US could hear.
they take the money and immediately turn around to buy assets with it
If you see some loose copper sticking out of the wall, may as well start pulling
Trump did this...for Putin.
Not sure if seriously
JDPON,… Putin???
