Ghana plans to buy oil with gold instead of U.S. dollars | Hacker News Reader

Ghana plans to buy oil with gold instead of U.S. dollars

reuters.com

39 pointszenmacro35 comments

I still don't really get the benefit to this. The price per barrel they pay is going to be calculated in dollars, now it'll just be gold worth that amount of dollars. If they were sanctioned I would understand but schemes like this almost always result in a bunch of corrupt intermediaries making a lot of money. Recall the Oil for Food scandal, St. Petersburg in the 90s, etc.

It makes sense if Ghana doesn't have US dollars and expects to have difficulty acquiring them. Their trade balance with the US isn't stable.

But they would get US dollars from selling gold.

Depends on the buyer.

Why should Ghana prop up the US dollar? It, like most countries, have no incentive to.

How can Ghanna get US Dollars? They can't exchange because who needs Ghanaian currency? You need people with dollars to buy stuff from Ghanna in dollars. Doesn't matter if you have wealth, you only get dollars if outsiders let you.

If the US wants the dollar to prevail, it must buy stuff like gold and other items from other countries.

The value of gold goes up versus the dollar if you create less demand for dollars, right?

Buying oil w/o dollars could explain this article: https://www.marketplace.org/2022/11/22/somebodys-been-on-a-g...

And to get the gold they will sell their own currency, just like they did for dollars. And the people they buy oil from will turn the gold into dollars to buy US weapons and financial services (and treasury bills).

The ultimate effect will be the same except a lot more gold will have to be shipped around and some middle-men will get rich.

No.

They have their own domestic source of gold.

US dollars can only be minted in the USA so they have no domestic source of those, they're running low on dollars and they need them to purchase other international commodities besides petroleum.

So instead of selling gold for dollars and then dollars for petroleum, they'll sell gold for petroleum.

They won't have any more dollars than before.

And they'll need to ship gold to countries that don't actually really want to, just for them to sell it for dollars.

Still no free lunch. Still seems inefficient.

Definitely inefficient, but nobody has ever truly rejected gold since prehistoric times.

Well if there is some unexpected coup we will know why but Ghana might be too small for anyone to care.

The local US embassy must already be busy preparing/financing the next colorful revolution.

Why does it need to be a US embassy?

And when gold goes up. Ghana will lose out.

What about the likelihood they would then be getting more oil for the same amount of gold.

Might be the kind of loss they could profit from.

Ray Dalio is watching

Who is selling oil in gold? I'm curious how Ghana plans to pull this off; such a move would typically result in being cut off from world bank + WTO, if not invasion.

Today, lots of U.S. State Dept officials will be calling up pet editors (worldwide) to talk about Ghana.

Today, lots of editors will be looking up maps to see where Ghana is located. And reading the Wikipedia entries on Ghana, its economy, and its ruling elite.

Today, lots of news editors will be calling up their pet journalists today to seed negative articles about Ghana, its economy, and its ruling elite.

It would be interesting to track recent changes in various Ghana-related Wikipedia articles.

> Who is selling oil in gold?

India might be willing to trade refined products for gold.

> such a move would typically result in being cut off from world bank + WTO, if not invasion.

Typically? Has this happened enough times before that there's a discernible pattern?

I keep hearing about a BRICS+ commodity-backed currency, but I haven't seen any documentation on it. Where do people find out about these things? And could it be that Ghana will just use that and that settlement system? Do they have dollar-denominated debt?

Ghanna is getting crushed by their debtload right now. A different currency wouldn’t really make a difference. They also announced this morning that they will be asking their debtors to accept a mandatory 30% reduction in value of foreign bonds.

Perhaps try looking over the wall since almost none of established media companies seem interested in reporting the story?

> such a move would typically result in being cut off from world bank + WTO, if not invasion

The dollar depends to almost no extent on foreign oil sales. Global oil demand is 100 million barrels per month [1]. At $80/barrel that’s about $100 billion a year. We import over $300 billion a month [2]. That’s $3.6 trillion in foreign wallets a year looking for a way to be spent or invested. That’s why the dollar is dominant. Not how Ghana buys oil.

[1] https://www.mckinsey.com/industries/oil-and-gas/our-insights...

[2] https://tradingeconomics.com/united-states/imports

I don't buy the more elaborate version of "petrodollar" theories myself, but your first link says "Global liquids demand declined in October to 99.6 MMb/d". That's per day, not per month, so at $80/barrel it would be about $2.9 trillion per year in global oil sales.

Yup, sorry. Excluding America’s shared it’s about $2.5tn. Substantial. But not a concern for dollar hegemony.

> 100 million barrels per month

Isn't that 100 million per day?

Why would the WTO and World Bank stop working with Ghana? Who would invade Ghana and why?

If you don't want to trade in dollars, it's likely because you want to trade with states that have hard time handling dollars, that is, have bad relationships with the US and the West in general. They can as well be sanctioned, like Russia or Iran or Venezuela; by trading with them, you yourself may end up sanctioned. No wonder WTO won't work with you after that.

Usually a state in such a position is not very democratic or otherwise nice, but neither Venezuela, nor Iran, nor North Korea, let alone Russia, got invaded (for Russia, it's the other way around). Iraq was invaded, but Saddam's regime was the first to attack a US ally (the second invasion was poorly reasoned though).

> Iraq was invaded

Caveat being, this was to destroy the scud missiles launched at Kuwait, and then the US left. Agree about the second one though...

Didn’t take long for the words oil or dollars to invoke the usual dog whistles.

What’s happening here is that a small country is destroying its own currency via spending and corruption which yields the inevitable inflation or hyper inflation as the government decides that this whole economics thing is overrated. They have gold reserves which may or may not be worth anything, so they’re trying to use that because they are currency is in the middle of a quite predictable crush.

There is no secret New World order that is forcing yhr United States military to go to war anytime anyone thinks about not using the dollar.

Dog whistles to what? Petrodollar conspiracies are linked with american imperialism, not new world orders.

If you want to poison the conversation with accusations of dog whistles that only you seem to be hearing, at least get them right.

Different heads, same tin foil.

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