Petrodollars

The word petrodollar is reference to the fact that oil is bought and sold around the world in dollars. Saddam Hussein threatened to sell oil not in dollars and the US invaded Iraq. In Feb of 2008 Iran opened a new oil sales market selling oil in non-dollar currencies and within a few months Venezuela followed suit. China has been dumping dollars for the past five years and now they are talking about buying Russian oil with non-dollar currencies. There is a push among countries around the world to set up a special currency in the International Monetary Fund, (IMF) to replace the dollar as petrocurrency. If this happens the US will have to relinquish its coveted position in the petrodollar market and will have to compete in the world market without this advantage. It is fortunate for the US that as we approach this time we are developing our own source of oil which will be enough to make the US an exporter of oil. Another added incentive for the world to move away from petrodollars is the coming inflation that will hit the US because of all the money the Fed is printing.