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by JumpCrisscross
1696 days ago
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> oil is quoted in US dollars As a former trader, this claim cracks me up. It makes the times I quoted crude contracts in euros and loonies and yen seem so subversive… The truth is, until recently, dollars were easy to transfer. The Fed started moving money electronically in 1915; by 1918, a national wire system was established [1]. Between the USSR and U.S., only one embraced free movement of capital. As a result, when Lufthansa bought Airbus jets, they settled in dollars, and trades quoted in pounds would be settled in New York in dollars. That has since changed; so has how oil is traded. The last time the petrodollar hypothesis was remotely true was in the early 1980s. [1] https://en.wikipedia.org/wiki/Fedwire |
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