I'm going to explain the petrodollar to you guys because most of you don't understand it, the United States is fucked beyond belief and we only have so much time left. Remember that the petrodollar is a circular phenomena. Please read each step carefully, as each one builds on the next step.
1. US prints fake fiat currency. Its just paper, worthless green paper you can't even wipe your own ass with.
2. US forces all oil producing/selling countries to sell oil and only accept the US dollar as currency. You can't buy oil unless you use the US dollar. By doing this, you create a demand for the US dollar.
3. Oil producing/selling countries build up large piles of US cash, this is not good, cash needs to flow, system has to be flowing. So we sell US weapons, tanks, jets, rifles, ammo, etc to these oil producing countries, and tell them they must use the weapons to further secure the oil and continue the petrodollar.
This system is why we are """allies""" with Saudi Arabia. If this system collapses, the entire American economy collapses and we lose forever. We're trapped and there is no way out. Now you know just how bad it really is.
Hello. Genuinely asking questions here. So no country can sell oil in a different currency? How did the US pull this off?
Nicholas Cox
K lol
William Anderson
Libya tried to, Iran is flirting with it....starting to make sense now?
Matthew Myers
When it become reserve currency.
Henry Martin
By being practically the only navy after WW2
Ryan Roberts
Iran was talking about switching to the euro for oil sales
Blake Torres
>I thought Jews were smart?
Liam Jones
nice fear mongering. the reality is that many large economies have dropped the dollar and even the EU is considering it.
saudi arabia isnt that big of a producer of oil any more and its because of over dependency during this entire war on terror as well as a russian power play and american greed which pushed for energy independence. in the 80s sure your argument is valid . today not so much
Landon Smith
Not everywhere, they still trade oil in rubles, renmimbi, all sorts of Arab currencies not always usd just a majority
The dollar being the world reserve currency harms us more than helps, it restricts what we can do with the exchange rate.
Kayden Hill
Not gonna happen.
Levi Gomez
>tyrone
Brody Rivera
This is why the CIA developed Bitcoin
Cameron Ward
Bitcoin is an NSA invention proof: mit paper 'how to make a mint' Fuck Bitcoin tho
OP: You seem to be redpilled on the petrodollar but bluepilled on the fact that leaving the petrodollar is exactly what everyone in Trump admin wants how they handle the transition, is another question my guess is that they will take the least destructive approach
Tyler Miller
What happens when this ends? When we produce our own oil and stop caring what currency they sell it in?
Landon Howard
We now produce more oil than we consume, this is why you're seeing the US backing off of the world stage and the rest of the world is getting dicked down by the lack of our naval support.
The United States is going to be a net oil exporter starting next year. We beyond petrodollar now.
William Allen
Watch what happens to countries who float that idea. China and Russia are flirting with it now. But pulling the ole Iraq treatment isn’t possible on either of them.
Jackson Flores
Its basically the agreement the US made with the world in exchange for security and keeping the shipping lanes open. It started with the Breton-Woods agreement in the 50s which the gold backed USD the global standard that everything else was pegged to. But in the 70s the US killed the gold standard then experienced runaway inflation when foreign countries started depleting their USD reserves. So the petrodollar system was a solution that let the US "export" its excess currency to back to foreign reserves since they would need the USD to buy oil. If oil wasn't sold in USD anymore, the need for USD reserves would plummet. Its not an apocolypse scenario because theres still trillions of dollars worth of other reasons to hold USD, but it would be a very rude awakening for Americans to have to feel the effects of all that useless fiat flooding back into the domestic economy. So we're stuck. We have to enforce Saudi Arabias foreign policy so that they don't turn OPEC against us. China and Russia's single biggest play against the US would be to find a way to make Yuan denominated oil a thing.
Luis Gray
It's actually a very good system, and it works for reasons beyond this -- like because the US is a very stable entity overall, and our banking and economy (while not without flaws) is very open and more to the point incredibly transparent. Beyond the trade cycle the OP mentioned which creates a virtuous circle, that's the big reason why the USD remains the world's majority reserve currency. It's safe. You buy T-bonds and you're going to get a return. Always... or at least, that's been the experience so far, and for the forseeable future.
The problem is, for the people who argue about swapping reserve currencies, where do you park all that cash? The Euro? Unstable, and it's actually shrank as a forex holding choice -- too many internal problems and chaos with the UK dropping out, and so many member states borderline insolvent. The Chinese RMB? It's not freely traded, or floated -- and no one trusts the Chinese. Plus their domestic economy is a hot mess and a huge bubble is about to pop from all those bad loans and US trade pressure. No dice. Those are the only two realistic options. Hell, even the Soviet Ruble was a huge mess (no surprise) and was never anything but funny money.
The reason China (and Russia) have shifted their forex holding away from USD is purely sanction and trade related. Some oil is purchased now with RMB, but it's a pittance. OPEC doesn't want to deal with holding a risky currency that the Chinese might just tank next week to goose their export volume.
Carter Cooper
Its "good" in the way that it keeps the global economy ticking. But it also means America is eternally tethered to being OPECs muscle. You can tell how deeply we're intertwined with their foreign agenda by the way candidate Trump used harsh rhetoric against the gulf states but president Trump has really only spoken of them as our allies. The burden Americans suffer in order to keep the global economy afloat is becoming too much. Its not going to be tolerated much longer
Juan Morales
What about the part where we are net exporters of energy and oh yeah... The fact that the entire rest of the world's international trade is only possible because of our navy, we are the SOLE guarantor of security in the world, nobody else can do what we do, our navy is bigger than the rest of the world's combined, and if we stopped production it would be 2 centuries before anybody catches up. Not to mention that our nation is the most self sustainable in terms of what we produce. North America will always do well because of the US and absolutely nothing with ever change about American supremacy.
