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by JumpCrisscross 1303 days ago
> America’s superpower status rests on being the reserve currency for petroleum imports

No, it doesn’t. America’s economy and thus voters like cheap oil. America’s massive consumer and industrial base underwrites its currency’s power.
2 comments
mikymoothrowa 1302 days ago
Why does international oil trade primarily happen in dollars then even when USA is neither of those countries nor is it the biggest trade partner for either of those countries?

Also, what industrial base?

Also, How does Srilanka holding dollars benefit from a strong US consumer market?

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JumpCrisscross 1302 days ago
> Why does international oil trade primarily happen in dollars then even when USA is neither of those countries nor is it the biggest trade partner for either of those countries?

Most international trade happens in dollars. This is due in part to competence: the Fed had electronic payments in 1915 [1]. In part to geopolitics: America was the only advanced economy not bombed into oblivion after WWII, an advantage it used to create the Bretton Woods system [2]. And in part to practicality: there aren't many freely-convertible currencies issued by big, stable countries.

> what industrial base?

The U.S. is a massive manufacturer and manufactured-goods exporter [3]. (Number 2 is Europe, another reserve currency issuer. Number 1 is China, which doesn't have an open capital account.)

> How does Srilanka holding dollars benefit from a strong US consumer market?

America is Sri Lanka's top export partner [4].

[1] https://en.wikipedia.org/wiki/Fedwire#History

[2] https://en.wikipedia.org/wiki/Bretton_Woods_system

[3] https://en.wikipedia.org/wiki/Manufacturing_in_the_United_St...

[4] https://oec.world/en/profile/country/lka/

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saimiam 1302 days ago
Both Russia and China have been pushing to do their oil settlements in a basket of currencies and not just the dollar. This should tell you all you need to know why KSA has the US right where it wants them.

The British Pound is a powerful currency backed by an industrial base and a consumer led economy everyone wants to sell into. EUR is the same way. But neither of them are superpowers because no other country needs the GBP or EUR like they need the USD.

Countries all around the world keep USD in their current account balance even if they barely import stuff from the US because every country needs oil and oil can only be bought with dollars.

Say your high school bully demanded 10 SchruteBucks every day to leave you alone at lunch. And the only supplier of SchruteBucks in the whole world was this paper salesman called Dwight Schrute.

Quite evidently, your entire life would revolve around making sure Dwight was still willing to give you SchruteBucks just so that your bully would stay off your back for one more day.

That bully is KSA. Dwight is the US. The kid sucking up to Dwight is all the other countries in the world.

When Putin rants about a unipolar world, this is what he is talking about.

It’s an unjust world where we can’t afford to antagonise the US without also running the risk of not being able to buy petrol to run our economy.

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