by David Greenberg at The Daily Financial Trends
Former White House official Paul Craig Roberts is warning that as more nations all over the globe move away from using the dollar in energy trade, the consequences for the United States economy could be quite severe.
A former US Assistant Secretary of the Treasury for Economic Policy in the Reagan administration, Roberts penned an entire article on the topic, which was published Monday. It warned that if the petrodollar were to cease being the predominant means of settling energy contracts, the value of the dollar would plummet, which would have massive effects on US inflation, interest rates, and economic growth.
In the article he cited Saudi Arabia’s recent statement that it would be open to accepting payment for oil in other currencies beside the dollar. Since at present nations looking to purchase oil must retain a reserve of dollars to use for payment, if Saudi Arabia were to allow payment in other currencies, nations would immediately release their reserves of dollars back into the global market. The surge of additional dollars would immediately cause the value of the dollar to drop precipitously, potentially triggering a hyperinflation event.
By forcing nations to pay for oil in dollars,…
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