One of the reasons that there continues to be a strong demand for the US currency, other than it’s role as a global reserve, is that all international crude oil transactions are denominated in the US dollar creating an artificial demand. Shortly before the US invasion of Iraq there were reports that Saddam was planning on making oil sales to European countries denominated in Euro rather than in US dollars. I felt then, as I still do, that this was possibly a contributing factor in the real reasons for the American driven invasion.
Now there are rumours that Kuwait, the recipient of so much American largesse after its invasion by Saddam, is now considering making the switch.
If they do, and perhaps other exporters follow, this must have a long term detrimental effect on the dollars value. What will that mean for the American economy?
Now there are rumours that Kuwait, the recipient of so much American largesse after its invasion by Saddam, is now considering making the switch.
If they do, and perhaps other exporters follow, this must have a long term detrimental effect on the dollars value. What will that mean for the American economy?
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