A lot depends on whether Saudi Arabia decides to start trading in oil in currency other than dollars. China, Russia and Brazil are already doing it. So are countries under US sanctions - Venezuela (an OPEC member), Cuba, Iran, Syria - what other remedy? This is another big step in the decline of the US empire.... Monica Crowley (ex US treasury): It's really hard to overstate exactly how catastrophic the abandonment of the U.S. dollar would be as the world's global reserve currency. Look, since the end of World War II, the dollar has been the safe place to go, and it's been backed up by a couple of things. It originally was backed up by gold, but President Nixon took us off the Gold Standard, so there's no hard asset backing up the dollar anymore for the last 50 years, but also it's been backed up by the strength and economic power of the United States and the fact that oil has always been traded in dollars. If that were to end, that would mean the end of the U.S. dollar. If Saudi Arabia decides to join with America's enemies here and start trading oil in different currencies, that is going to undermine the entire global economic system. And here at home, you know what it's going to mean for us? It's going to mean raging inflation, so much worse than anything we have ever experienced.
Puts Brexit into perspective, But, again, maybe it is a pain we need to go through simply to get to the other side. The US is surrendering itself, it seems, and perhaps in the long run it is for the best. The idea that we would replace it with something like the WEF is more horrifying than the idea of the US failing.
