“””I don’t get the petrodollar issue. Who cares if Iran won’t accept dollars? (Except by the plane load, of course!) We don’t buy their oil anyway, and if we did we could easily convert our currency into Euros (or whatever) to make the purchase. Any other country has their own currency (or, in the case of European countries, Euros), and it has to be converted into whatever currency Iran will accept. Then, to make purchases from other countries, they have to convert that currency into whatever the selling country will accept. Currencies are, roughly speaking, fungible through the worldwide currency trading network.”””
Is the exchange rate always one unit of equal value to one unit of equal value between currencies?
Where do dollars come from?
Who owns them?
Who benefits the most from their continued use?
How would you ensure their continued use?
Military force?
Do the owners of the dollars care about sheep?
Would they want to control the new-found natural gas and oil off Israel’s coast? Where will the pipeline go?
Why were HRC, Hussein, the Vatican and others hell bent for a Two State Solution?
https://en.wikipedia.org/wiki/Petrodollar_warfare
Because the dollar is used as the exchange currency, and especially for trade in oil, pretty much every nation has to hold dollars for trade.
To keep up with world dollar reserve demand we (The Fed) keep issuing dollars. Over time the dollars has lost value (purchasing power). Other nations still have to maintain a reserve dollars that now purchase less; They have to spend more of their currency the same dollar purchasing power. The result is a kind of an “tax” that the US levies against the rest of the world for using the constantly devaluing dollar.
Other nations resent this “tax” and are trying to develop alternatives to using the dollar for exchange, notably Russian and China.
There are negative consequences that others can perhaps explain (At this late hour!) If you don’t use Dollars for trade they you don’t need to hold US Treasury securities. In effect, it makes it easier to dump US Debt and destabilize the US economy.