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Laelth

(32,017 posts)
1. So long as oil is traded in USD, we can print as many dollars as we like.
Fri Aug 21, 2020, 09:20 AM
Aug 2020

So long as the USD is the world’s reserve currency (and it is so because oil is traded ONLY in USD), every other nation on the planet will buy our USD as fast as we can print them.

If you are a tin-pot dictator of a small country, for example, and there is either a massive increase in demand for oil or a massive decrease in the supply of oil, what are you going to do? You’re going to buy it on the open market and provide it to your people. If you don’t, your country descends into chaos, after which you and your political party will be destroyed. Because you must have reserves of USD in order to avoid such a calamity, you buy USD when you can. Every nation on Earth (other than the USA) keeps reserves of USD in order to regulate unexpected fluctuations in the energy market.

This is the ultimate source of our global power.

-Laelth

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