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He is correct. The only reason there appears to be a "petrodollar" is because the US dollar happens to be the world currency, so all international oil trades are made in US dollars. But, so what? So is almost everything else (though the Euro has been making inroads the past decade or so). He is also correct that only a small portion of international trade consists of trading oil. If for some reason everybody decided to stop buying and selling oil in dollars, it would only have a small effect on the value of the dollar.
The dollar is important because about 22% of everything produced anywhere in the world is produced here, because the US has long had a deep involvement in international trade thus allowing institutional momentum to be built up, and because the currency is so widely relied upon in global capital markets.
The dollar is important because about 22% of everything produced anywhere in the world is produced here, because the US has long had a deep involvement in international trade thus allowing institutional momentum to be built up, and because the currency is so widely relied upon in global capital markets.
We make 1/5 of everything?
Is that including services or just manufactured goods?
As noted, the dollar is important in part because we produce about 22% of everything produced anywhere in the world. Everything in this case means everything that is measured.
Is that including services or just manufactured goods?
The US produces around 20% of the world's manufactured goods by value, but is no longer the largest manufacturer (was passed by China ~2012)
The US as of 2016 is roughly:
~25% of Global GDP
~20% of Global Industry
~20% of Global Manufacturing
~30% of Global final consumption expenditures
~35% of Global R&D expenditure
~35% of Global Wealth
~40% of Global Military expenditure
This is why the dollar is the reserve currency.
being the reserve currency, contrary to popular opinion, is actually a large cost rather than a benefit.
He is correct. The only reason there appears to be a "petrodollar" is because the US dollar happens to be the world currency, so all international oil trades are made in US dollars. But, so what? So is almost everything else (though the Euro has been making inroads the past decade or so). He is also correct that only a small portion of international trade consists of trading oil. If for some reason everybody decided to stop buying and selling oil in dollars, it would only have a small effect on the value of the dollar.
On the contrary, if the whole world stops accepting Dollars for Oil and request Gold, We would be at the edge of the New World War leaded by th USA "heros" against Saudi Arabian "Tyrans"
There isn't a single reserve currency, but rather at least five. It's not like being crowned Miss America or something.
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