Marco on Nostr: Since 1973 the petrodollar has anchored the US dollar to oil. In this system, oil ...
Since 1973 the petrodollar has anchored the US dollar to oil. In this system, oil importers such as Japan, Europe or China need #dollars to buy #oil. The price of oil in dollars is thus equivalent to the dollar's international purchasing power. As long as this purchasing power is stable, it is prudent to store trade surpluses in US treasuries for later oil consumption.
Any dollar-demoninated price increase of oil, e.g. via depletion of oil fields or sanctioning of Russia, however, increases motivation to sell treasuries and move to alternative assets such as #gold or #bitcoin. This would destabilize the financial system because interest rates on treasuries would rise which would to collapse in an overindebted dollar system.
Great interview with Luke Gromen on What is Money?
https://m.youtube.com/watch?v=ReWaMNoAb18
Any dollar-demoninated price increase of oil, e.g. via depletion of oil fields or sanctioning of Russia, however, increases motivation to sell treasuries and move to alternative assets such as #gold or #bitcoin. This would destabilize the financial system because interest rates on treasuries would rise which would to collapse in an overindebted dollar system.
Great interview with Luke Gromen on What is Money?
https://m.youtube.com/watch?v=ReWaMNoAb18