@izzythepush,
izzythepush wrote:oralloy wrote:(Also, the so-called "petrodollar" isn't something that anyone in America cares about.)
There are plenty who do, people significantly smarter than you.
Wrong. Anyone who thinks the supposed "petrodollar" is an issue of any significance to the US has no more than 1% of my intelligence (and probably has quite a bit less than that).
izzythepush wrote:If another currency replaces the petrodollar then there will be far less need to buy dollars, (printed or in a bank account,) they'll be wanting to turn their dollars into the new petrocurrency.
No, those countries will continue to want to hold reserves of the currency of a large, stable, and reliable economy (meaning the US).
Anyone who thinks that the reason why countries hold reserves of dollars is because oil is sold in dollars is a goofy lunatic.
izzythepush wrote:That will leave a lot of unwanted US dollars/securities washing about the system leading to hyperinflation.
This is also why China would face hyperinflation if they suddenly had a huge pile of cash from selling off US bonds and nowhere to invest it in.
Setting aside for a moment the fact that countries would not be shedding dollars to begin with, if they did suddenly shed dollars, if the Fed is on their toes and doing their job they could easily adjust the money supply to absorb the influx.
China might also try to avoid hyperinflation by adjusting their money supply, but I suspect they don't have a large enough money supply to handle the influx.
I suppose China could simply burn all the cash they got from selling off US bonds. That would save them from inflation. But that would take an already-catastrophic loss for them and make it even worse.
I am well aware of petrodollar conspiracy lunatics.
The petrodollar nonsense first started among those far right guys who think it is against the law to pay taxes and think the dollar should be tied to the value of gold. But for some reason left-wing conspiracy nuts took it up themselves, and they haven't stopped babbling about it since.