Re:What is the Eurodollar System? (2020) [pdf]
by TMWNN on Monday April 11, 2022 @03:17AM
(#30985656)
>1. It is common to use USD because it is convenient, but it is not a standard. There is no structure that forces it.
[...]
>It is not the USD that is powerful, it is the US. The US is a vast economy with a strong rule of law tradition. Common use of USD is a side-effect of that.
I wish the legions who, in online discussions of the US dollar (or almost anything US foreign policy/military-related), always bring up how the US dollar/economy's strength is based on the "petrodollar", how the US goes to war to preserve the dollar's role as a reserve currency, how Russia/China/Saudi Arabia can cause the dollar to crash by using another currency, etc., would understand this.
No, kids, if Saudi Arabia suddenly started selling all its oil in Euros or Yen on renminbi, the US would not send the Sixth Fleet off its shore, any more than it did so to force KSA to use the US dollar to price its wares in the first place. Saudis (and Russians, and Chinese, and everyone else) use the US dollar because they find that a) using it is more convenient than another hard currency like the Swiss franc or British pound, and b) no one else wants riyals, rubles, or renminbi.
[...]
>It is not the USD that is powerful, it is the US. The US is a vast economy with a strong rule of law tradition. Common use of USD is a side-effect of that.
I wish the legions who, in online discussions of the US dollar (or almost anything US foreign policy/military-related), always bring up how the US dollar/economy's strength is based on the "petrodollar", how the US goes to war to preserve the dollar's role as a reserve currency, how Russia/China/Saudi Arabia can cause the dollar to crash by using another currency, etc., would understand this.
No, kids, if Saudi Arabia suddenly started selling all its oil in Euros or Yen on renminbi, the US would not send the Sixth Fleet off its shore, any more than it did so to force KSA to use the US dollar to price its wares in the first place. Saudis (and Russians, and Chinese, and everyone else) use the US dollar because they find that a) using it is more convenient than another hard currency like the Swiss franc or British pound, and b) no one else wants riyals, rubles, or renminbi.