Submitted by aresyves t3_127xmbp in explainlikeimfive
Omniwing t1_jegfdzd wrote
Reply to comment by ejpierle in ELI5: why does the US need the dollar to be the only primary form of currency for oil? by aresyves
We do though. The Nigeria can not buy oil from Saudi Arabia for any currency other than U.S. dollars. So if Nigeria doesn't have dollars, the easiest way to get them is to sell goods to the US for dollars, and then use those dollars to buy oil.
Also, Henry Kissinger went to Saudi Arabia in 1973, and we made a deal with them that they will not sell oil for any other currency other than dollars, and we will make sure the Sauds stay in power in the region and in their kingdom.
This is one way the U.S. holds it's hegemony over the world.
ejpierle t1_jeghjrr wrote
>The Nigeria can not buy oil from Saudi Arabia for any currency other than U.S. dollars. So if Nigeria doesn't have dollars, the easiest way to get them is to sell goods to the US for dollars, and then use those dollars to buy oil.
Well, that's not exactly the same thing. We can try to make sure a country we don't like doesn't have dollars to spend by not trading with them, but if they have dollars they can trade them for goods with anyone who will accept them. We can't say, "hey, you can't use your dollars to buy what you want bc that's our currency." And bc USD is the reference currency and is held by governments and private entities worldwide, what's to stop Nigeria from trading with someone else to get THEIR dollars and then using them to buy oil? The most circulated bill worldwide is the $100 USD. It's the currency of everything from commerce to crime all over the world.
>According to the Federal Reserve Bank of Chicago, nearly 80 percent of $100 bills—and more than 60 percent of all US bills—are overseas, up from roughly 30 percent in 1980.
There's no stopping the world from using their dollars amongst themselves for whatever they want.
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