Pertrodollar agreement with Saudi Arabia ends.

  • Leader
    June 8, 2024 6:56 PM CDT

    One of the reasons the dollar has been so strong over the past fifty years is because Saudi Arabia signed an agreement, on June 9, 1974, with the United States, agreeing to exchange in dollars.  Hence, the "petrodollar" earned it's name.

    Saudi Arabia has declined to sign another agreement with the United States to continue exchange in dollars for oil.  Saudi Arabia is attracted to the lure of BRICS and will likely begin exchanging with each countries fiat money rather than using the agreed dollar.

    This is a significant development and will accelerate the dedollarization in process as so many countries are discontinuing the use of the dollar.  The more the US dollars comes back to the US, the greater the downward spiral in the value of the dollar will continue.