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Does anyone know where petrodollars fit in this picture? Do they give the US a particular economic advantage?
by pdm55 7y ago
Does anyone know where petrodollars fit in this picture? Do they give the US a particular economic advantage?
- IllogicalLogic 7y agoIf the US priced oil in gold, it would hurt the US economy in a big way, you are correct. This is part of the reason Saddam and Gaddafi were put in the ground, they wanted to do just that. Not only does the US get to print the currency that oil is traded in willy-nilly. US also gets to export the resulting inflation (from excessive printing) to the rest of the world.
- NTDF9 7y agoIt gives the US a very big advantage. How? 1. The US never has to produce anything to buy oil. They can just print dollars and import oil. Another country, say Bostwana, has to produce something else, sell it to another country in exchange for USD and then they can buy oil. This is a significant crutch 2. The US will never have a shortage of oil before other countries do 3. The US can import anything it wants, whenever it wants. Say a year with bad weather caused low corn production. That will not take down companies dependent on corn. US can always print USD and buy corn from somewhere. Compare that to Brazil, who would just have to suck it up since they don't have enough USD in reserves to go import corn.