+1. I think the term petrodollar makes it seem it's all about the oil. The oil is important, but the most important part of it is the guarantee that the casino chips the USA issues can (and in fact have) to be used to buy things around the world, even when the USA isn't involved in the trade at all (for example, when India buys oil from Saudi Arabia).
The overall fate of the USD as the world's reserve currency depends on a lot of factors beyond this event, but I think we also shouldn't mistake this event as unimportant. I might or might not have important consequences, but it's also a data point that's telling on other diplomatic and geopolitical trends going on in the world.
> the term petrodollar makes it seem it's all about the oil. The oil is important, but the most important part of it is the guarantee that the casino chips the USA issues can (and in fact have) to be used to buy things around the world
This isn't the petrodollar. It's the post-Bretton Woods international order. (And a reflection of the depth and openness of the American financial system.)
Petrodollar refers to a specific aspect of that arrangement in which America mandated certain oil exporters only trade their oil for dollars and then reïnvest those dollars into U.S. Treasuries in exchange for military and political support. That's done.
On the good side, despite all diplomatic posturing, the system have been working really well for everybody, all those countries have massive USD reservers, and nobody really wants the dollar to crash. The appetite of american consumers have been serving the world really well, nobody wants the party to end.
But american foreign police need to have some serious re-calibration if washington wants the party to go on. The times for pushing and shoving other countries are probably over.
The overall fate of the USD as the world's reserve currency depends on a lot of factors beyond this event, but I think we also shouldn't mistake this event as unimportant. I might or might not have important consequences, but it's also a data point that's telling on other diplomatic and geopolitical trends going on in the world.