I do wish someone could explain to me why this would happen:
The dollar could collapse if Opec officially admits considering changing the pricing of oil into alternative currencies such as the euro, the Saudi Arabian foreign minister has warned.
It\’s a standard part of the woo woo case: that the US benefits in some enormous manner because oil is traded in dollars. I\’ve seen it stated as fact that the Iraq War was all started because Saddam was about to sell oil in euros, not dollars.
Now it is true that the US gains from the fact that the dollar is the de facto world currency. By some $20 billion a year in seignorage. But against a $12 trillion economy and a getting on for $3 trillion Federal budget, that\’s peanuts.
But I simply don\’t see that oil being priced in another currency makes any difference. Anyone know what the supposed mechanism is?