patrick.net

Tiny brains throwing around ‘petrodollar’ like it’s a thing are my favorite.

It’s not the ‘petrodollar’ it’s the ‘everything dollar.’

You see, only a tiny fraction (10%) of America’s GDP relies on exporting stuff.

Compare that to the EU at 45%
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The US has the largest GDP in the world but it’s also the most self-reliant — and therefore resilient — GDP in the world.

And because of that, everyone wants access to the American consumer: it’s the most resilient source of aggregate demand.
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That’s why when we have economic or financial crises, everyone else gets dragged down.

And it’s why other countries’ economic crises don’t necessarily drag us down: because trade with them is a garnish on an 32oz dry-aged economic porterhouse that’s all ours.
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There is some fever dream hallucination that the value of the dollar relies on energy trade.

Horse puckey.

The value of the dollar is that accepting it as payment gets you access to the best market on the planet.

Because that’s how America pays for stuff.
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Now: if you, as a sovereign nation, don’t want access to that demand then uh… I guess that’s fine.

Have fun enjoying drastically reduced economic potential.
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Consider this: in a world where all global trade were to simply cease, everyone’s quality of life would go down.

But on an relative basis, America would be even more ahead economically.