Saudi Arabia Ends the Petrodollar Agreement – IOTW Report

Saudi Arabia Ends the Petrodollar Agreement

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The 50-year-old petrodollar agreement between the U.S. and Saudi Arabia was just allowed to expire. The term “petrodollar” refers to the U.S. dollar’s role as the currency used for crude oil transactions on the world market. This arrangement has its roots in the 1970s when the United States and Saudi Arabia struck a deal shortly after the U.S. went off the gold standard that would go on to have far-reaching consequences for the global economy. In the history of global finance, few agreements have wielded as many benefits as the petrodollar pact did for the U.S. economy.

A Boon to U.S. Bonds

The petrodollar agreement, formalized after the 1973 oil crisis, stipulated that Saudi Arabia would price its oil exports exclusively in U.S. dollars and invest its surplus oil revenues in U.S. Treasury bonds. In return, the U.S. provided military support and protection to the kingdom. This arrangement was a win-win situation for both; the U.S. gained a stable source of oil and a captive market for its debt, while Saudi Arabia secured its economic and overall security. More

12 Comments on Saudi Arabia Ends the Petrodollar Agreement

  1. See what the Cloward-Piven Leftist agenda of “Looting the Treasury” does!
    Drive up the debt to astronomical heights until the Dollar is worthless by “Overloading the System”!
    That’s the Cloward-Piven way… and that crabby old cunt Piven is in this administration!!

  2. Translation: It’s no longer “Our friends, the Saudis.”

    That’s good. But otherwise, the collapse of the dollar is happening about as predicted. And that’s bad.

    Buckle your seat belts. It’s going to be a bumpy n̶i̶g̶h̶t decade.

  3. Joe has no idea what’s going on and the progressives who run things go at foreign affairs like it’s a progressive crusade to force the world to come up to their values. A real Sh*tshow in other words, except we get a front row seat and have to pick up the entire cost of production.

  4. This has the potential for a disaster for the United States. The only saving grace is that at this point, the US still has the most stable currency – although the Dems and Congress are trying their damndest to change that.

  5. We’re fucked in the sense that the international buying power of the dollar will decrease. We’re blessed because now we’ll be the better place to outsource for cheaper labor.

  6. Two things used to give the U.S. fiat dollar value:

    1) the petrodollar and
    2) federal taxes payable in Federal Reserve dollars.

    At least we still have federal taxes.

  7. The insurmountable, ever increasing federal debt, will be upon each of our, our children, grandchildren and great grandchildren to shoulders. Before its all over our great-great and great great great grandchildren & their families will be crushed with debt.
    The bright side is that every member of congress will leave federal service as $MULTI-Millionaires, with full cash campaign committees to fund their lives. IT PAYS $MILLIONS to be a public “servant” !


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