Many economists are projecting that saudi Arabia will likely depeg from the petrodollar to cover shortfalls in its budget which could amount to the tune of US$85B this year.
Will the depeg lead to further political tensions, and weaken the US$ hegemony in the oil trade, and worse, global trade?
Just yesterday news surfaced that come November 2016, oil could trade on the SPIMEX (St Petersburg International Mercantile Exchange) in Russian Roubles instead of US$. Just to recap, Russia is one of the larger buyers of gold. Does this mean that Russia has intention to back the Roubles with gold?
Russia is the world's largest oil producer, roughly a third of OPEC's production. Should this happen, it could impact upon the petrodollar hegemony as well.
Lastly, US GDP is expected to weaken as economic indicators are pointing to disappointing gorwth with some sectors being in recession (manufacturing, mining and oil). Even the S&P 500 earnings for Q4 is expected to be lower, then third month in negative territory. This will force the Fed's hand not to raise interest rates. As the results the US$ could weaken.
My own opinion? If two of the three conditions above are fulfilled, then we could see a weakended US$. Further upside if the Fed unleashes QE4 with negative interest rates (NIRP). Gold and silver could test historic highs.
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