The second part of that equation is that the Saudis would roll those dollar profits into US Treasuries.
This provided a constant market for the USTs, AND it established a “need” to retain dollars in central bank reserves to allow for the international settlement.
The question that I don’t see many people answering is what is Saudi Arabia supposed to do with Yuan or Rupees? They will certainly use the Yuan to import stuff from China, but I think a lot of it will be converted into dollars and used to buy stocks, USTs, and other investments priced in dollars.
The way I see it, we’ll have a debt crisis in 5 years or so. Congress will come to an agreement to reduce social security payments by 33% for everyone. But nothing will happen until the markets demand it.