The yuan-backed crude oil futures were rolled out yesterday. This potentially has huge consequences for the dollar.
So… What Would Happen If The Petrodollar System Ended Tomorrow
Allow me to briefly explain the impact that a sudden loss of the petrodollar system would have upon the United States of America.
Foreign nations would begin sending a flood of U.S. dollars back to the United States in exchange for the new currency needed for oil.
The Federal Reserve would lose their ability to print more dollars to solve America’s economic problems.
The Treasury Secretary and the Federal Reserve Chairman would meet to determine the best course of action.
That action would involve an immediate and dramatic increase in interest rates to reduce America’s money supply.
Hyperinflation would ensue temporarily while the interest rates took time to take full effect.
All oil-related prices, including gas prices, would reach outrageous levels.
Washington would soon realize that the total amount of money in the system would have to be dramatically slashed even further, leading to an even higher increase in interest rates.
The clueless American public would demand answers. Those on the left would blame the right. The right would blame the left. And both political parties would seek to blame the Federal Reserve.
People with adjustable rate debts would be crushed and massive layoffs would occur as businesses suffered from the high interest rates.
Asset prices across the board would plummet in value.
Amid the financial carnage, an economic recovery eventually would begin to take place. But this new American economy would be tremendously smaller due to a drastically reduced money supply.
https:// followthemoney.com/petrodollar-collapse-part-3/