Linked article is not very sensible. It purposely conflates the dollar's role as a reserve currency and its role as the numeraire in international oil transacti

Linked article is not very sensible. It purposely conflates the dollar's role as a reserve currency and its role as the numeraire in international oil transactions. The first is a decision any central bank can make, and most keep a number of currencies on hand, though dollars predominate. The other is a decision made by OPEC in the 1970's which they have not seen fit to revisit, and frankly not something Iraq could do unilaterally. Beyond that, the idea that there is any action Iraq could have taken which would have caused the dollar to fall in value 40-50% is ludicrous at its face. The economy of Iraq compared to that of the United States is tiny. The dollar reserves held by Iraq are tiny. And frankly while the oil production of Iraq is not tiny, Saudi Arabia could make up the difference without breaking a sweat. (Saudi Arabia produces well below capacity to manage the price.) Finally, I don't think that a decline in the dollar of 50% would have quite the effect described in the article. As the largest external holder of dollar denominated debt, China would smart, but even more than the paper loss on there debt, their exports would no longer be competitive in the US, and they would lose their leading customer. (Which is why China would not let it happen...) On the other hand, American manufacturing and natural resources would once again more become competitive as real wages and costs fell. Such a decline in the currency would lead to a real decline in quality of life no doubt, but its quite possible, that rather than a recession, you'd see very low unemployment.