Saudi needs dollars to buy everything else since they make nothing and import everything. Everybody else will take their dollars, so it’s a worthwhile thing to have around for them. Sure, you can’t buy a kebab on the streets of Jeddah with them, but the chicken that kebab was made with was almost certainly bought in some way using those aforementioned petrodollars.

How does the seller selling the kebabs in riyal get the chicken given they only earn riyal?

You need somebody who wants riyal for dollars. Why would the chicken seller not take the riyal since that helps his customers and do the FX magic themselves? "Local currency sales" is what marketing men recommend. It's just the latest form of vendor financing.

Who wants riyal for dollars. People who buy kebabs in Saudi. Those who live and work there.

As I said the dollars are useless in Saudi, because that's not the local currency stuff you need day to day is priced in.

The point again is that in aggregate you can buy things in the currency you have and you can sell things for the currency you want. The financial system smooths the path to that deal - for a price.

As anybody with a Paypal account and who trades internationally understands.

>How does the seller selling the kebabs in riyal get the chicken given they only earn riyal?

They buy the dollars they need to buy the chicken off the Saudi national bank for Riyal. That’s their job. Controlling that rate is a primary way the SA government manages their domestic economy.

> Dollars are similarly useless in Saudi Arabia.

This is simply outright wrong.

According to Wikipedia, the last arms deal that Saudi Arabia struck with the US was, that alone, around $350 billion.

That's more than most of the nation's GDPs.

Trying to put a Ponzi scheme such as Bitcoin on par with the US dollar is either an entirely clueless assertion or a disingenuous claim made in line with all the other pump-and-dump schemes that plague the so called crypto currencies.

Currency is slightly more fungible than this. Not enough to invalidate your point, but worth noting that I've purchased food, transportation, lodging, and knickknacks in Saudi/Bahrain/UAE and Oman using USD. All of the above items, in each country. It's certainly not a universal currency though, I'd say the vast majority of vendors were not interested in taking USD. Even then though, generally you could find a private citizen/local expats from many other continents that would be willing to perform currency exchange to/from popular currencies at a rate profitable for them.

Vendors/citizens of some other countries - Jamaica, many parts of Mexico, many parts of Canada, also are happy to deal in USD as a customary business practice, at least in my experience.

Sure. It's the same here. I can buy stuff with Euros in York rather than the usual GBP. But generally people want the local currency because they have fixed liabilities in the local currency - taxes and debts. Chances are they'll take your money and then swap it out for the local version rather than hold it.

The point of the article is that around the world very large amounts of loans have been denominated in US dollars, even in countries that don't use USD. That means there is always a constant and large demand for USD to repay those loans.

So outside of the US, no USD is not just a store of savings, it's a means of repaying debt. Hence why people want it and will accept it as a first preference over most other currencies when international transactions need to be made.

Repaying debt is the same as an increase in the store of savings.

Your personal balance sheet moves in the same direction from a lower value to a higher one.

Not in USD it doesn't. You got your loan in USD, spent it to buy whatever you needed, you have assets, not USD. You need USD to repay the loan, where do you get them from?

He's talking about Saudi Arabia, not random people in Saudi Arabia...

Saudi is random people in Saudi. Countries aren't sentient on their own.

What is countries? I mean it's just atoms, man... This is all so trivial!

Well no, in this particular case it’s the house of saud.

Can always buy US weapons and politicians with dollars