So this is why things are going south so fast...

The petrodollar, which has been in place since 1974, officially expired on June, 9, 2024.

This was a deal that was put in place to bring Arab nations and the U.S. closer together. It was designed to circulate dollars between the two regions in exchange for oil sales. As a result, oil has been a commodity that has been priced and traded in dollars. Now, as this deal has not been renewed, Saudi Arabia can trade or deal in currencies outside of the U.S. dollar; they can now trade in yen, euros, Chinese yuan and even the highly-contentious Russian ruble.

Truth be told, this has been happening in the background since the invasion of Ukraine by Russia and the Western world subsequently placing sanctions on Russia to limit its exports. The sanctions never worked, as all they did was form new trading alliances and change the partnership agreements for good. As a result, the world has forever changed.

https://pro.thestreet.com/market-commentary/end-of-petrodollar-shows-changing-geopolitics

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Captain · 61-69, M

OK but how does all this fall apart when the worlds super giant profitable corporations are mostly American, and Trump is bending the rules to make sure they stay that way ?? He doesnt care about Europe but at the same time he's making sure Europe still has to buy American ? How much of those imports are actually American goods fabricated abroad and re-imported to make finished goods for the home market. Yes the system is broken, but I thnk that system brakes when everyone else goes broke first - as happened through the roaring tenties when we had Jarrow hunger marches and you had massive wealth creation, The world is definitely going that way but Trump is making sure it doesn't fall over. And whole US bond yields remain low no one cares. Yes - well obvious no so I'd be interested to no how this falls apart.

Tastyfrzz · 61-69, M

@Captain it certainly does feel like tge world is falling apart. And massive layoffs with no hope of employment seems likely and appears to gave already begun. The only jobs available are going to be what the migrant labor was doing.

Captain · 61-69, M

@Tastyfrzz SWo the stock market has to crash first when reality kicks. in ??

whowasthatmaskedman · 70-79, M

The $US was originally backed by gold.. Then it was backed by oil. Now its backed by........?😷

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whowasthatmaskedman · 70-79, M

@Tastyfrzz I thoink its floating very much in the manner of those roadrunner and coyote cartoons, where for a couple of seconds the coyote is standing on nothing before he realises it and plummets. Yes. Plummets is the right word. 😷

Captain · 61-69, M

@whowasthatmaskedman Hello guys. are you suggesting you see a dollar crash or a US stock market crash ? I Can't see a dollar crash because its doing better against other currenices (except the pound which makes no sense ot me as we're going bust), The US is the country best equipped to do well in a low trade high tariff situation because it is self sufficient in so much. I can see a massive stock market adjustment because the p/es are daft compared with anyone else and the dollar is rising. This would come with a wave of lay offs and economic recession due to decreased exports, but I dont see a dollar collapse until after this happens, a dollar collapse before that scenario played out would prevent that scenario playing out ? What did I miss here ?

whowasthatmaskedman · 70-79, M

@Captain Sorry. You did miss the biggest factor. America imports way more than it exports and has done for decades. So your statement that America is well placed to do well in a low trade high tariff environmanr is just plain wrong. Thats how America gotr into this horrendous foreign debt situation. They sell less than they buy..😷

Tastyfrzz · 61-69, M

[media=https://youtu.be/esR_uxKC27o?si=xRaJuB-1ikxI8CR9]

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