If you keep on with the logic of my reasoning the problem is that we would seriously increase the value of the euro.
The potential for it displacing the dollar as a reserve currency would be put into motion.
The result would be that in order to continue to service our debt we would have to increase the interest rate that we pay on treasuries.
There is no flaw in my reasoning. The value of the dollar is what would be at stake.
If we are unable to service our debt then the option is default. Given that we must sell a billion in treasuries every day just to serve the interest we currently must pay the potential for allowing the dollar to fall from favored status must be avoided.
Buying oil with dollars sends dollars out into the world. Selling dollars to buy Euros sends dollars out into the world. I'm not seeing a huge difference.
The potential for it displacing the dollar as a reserve currency would be put into motion.
Arabs can take their oil dollars and buy Euros with them now.
Given that we must sell a billion in treasuries every day just to serve the interest we currently must pay the potential for allowing the dollar to fall from favored status must be avoided.
Sure, if the world wants to buy French/German Euros instead of American dollars that would raise our cost of capital. Don't see it happening yet.