- A Petroyuan Would Be a Kick in the Gut for the Dollar
by MICHAEL MAHARREY, https://schiffgold.com/
Last week, I asked the question: is the US undermining the dollar’s credibility?
It appears the answer is — yes.
In another blow for dollar dominance, Saudi Arabia is reportedly considering pricing at least some of its Chinese oil sales in yuan. According to the Wall Street Journal, the move would “dent the US dollar’s dominance of the global petroleum market and mark another shift by the world’s top crude exporter toward Asia.”
The “petrodollar” serves as a crucial support for the US dollar. The majority of global oil sales are priced in dollars. This ensures a constant demand for the greenback. Every country needs dollars to buy oil. This helps support the US government’s borrow and spend policy with its massive deficits. As long as the world needs dollars for oil, the Federal Reserve can keep printing dollars to monetize the debt.