by Craig Masters
On January 17, the Greeley Gazette posted an article authored by Craig Masters recapping town-hall style meetings held in the area by U.S. Congressman, Cory Gardner. The Keystone XL pipeline was one of the topics the congressman addressed. His position on the Energy and Commerce Committee gave the audiences a rare opportunity to ask questions directly to a member of this powerful congressional committee.
That series of meetings took place just days before President Obama signed a Presidential Order denying the Keystone XL project the necessary permits to proceed. Today it is reported by the congressional blogs that House republicans are studying ways to reassign the responsibility for the permits away from Obama; clearing the way for approval of the pipeline and the thousands of jobs it is expected to add to the U.S. economy.
Earlier this week the president of the Laborers International Union, David Mallino, issued a statement in support of the Keystone XL pipeline. Mallino stated that the project would not only create high-quality jobs, but the addition of millions of barrels of oil to North America’s supply would most certainly have a stabilizing effect on rising heating oil prices across the Northeast.
However, the Jan. 17, Greeley Gazette posting referenced a trade agreement between Japan and China which contained an error. Yen was typed instead of Yuan.
Congressman Gardner pointed out to the audience that if the U.S. denied the Keystone XL pipeline project, Canada would simply export the crude to China. In their December trade agreement Japan and China, the number two and three economies in the world, had already agreed to use the Chinese yuan as the basis for much of their trading. Several leading news services such as the New York Times, Blomberg News, the Financial Times online and others, featured articles about the negative effect this trade agreement would have on the value of the dollar.
Blomberg News even featured a headline: “China-Japan Currency Deal Points Way to New Monetary Order: View” introducing an in-depth analysis of the changes to be expected as the world’s number two and three economies move away from the dollar. The Blomberg article stated, “The agreement announced between China and Japan to strengthen financial ties and promote yuan-yen trade is a small, but notable, step toward a new global economy.” The author continues, “… the deal signals that a deeper transformation is under way …”
But none of these articles from December included the devastating impact on the dollar if China suddenly became the recipient of millions of barrels of crude oil from Canada because the United States chose to decline to build the oil pipeline.
In the Gazette article, however, when the word “yen” was mistakenly typed instead of “yuan”, an astute reader, jbowen43, responded:
“”I guess facts are still scarce at a Gardner town hall meting. Why would the Japanese Yen become the standard currency if China were to get the tar sands oil?”
The reader seemed to be suggesting Congressman Gardner had failed to check his facts, implying the congressman didn’t know the difference between a yen and a yuan. The congressman didn’t specifically mention any currency by name, those of us in attendance understood what he was saying. Sadly, it wouldn’t matter what the name was of any currency that became the basis for payments between these two major trade partners, the prediction in every major financial information outlet is the same: the dollar is expected to suffer in both prestige and value. Adding the bonus of Canadian crude to China by denying the construction of the Keystone XL pipeline, Obama will further reduce the strength of the dollar and the U.S. economy will feel the affect in nearly every sector.