reply on: Why did ALL countries abandon gold & silver money to use fiat currency? \ stacker news ~econ

1153 sats \ 8 replies \ @Undisciplined 16 Jan \ on: Why did ALL countries abandon gold & silver money to use fiat currency? econ

I'm sure someone will provide a more detailed answer, but basically the US insisted on everyone using the dollar as their reserve currency. After going off the gold standard, the petrodollar was created, which was a deal with the Saudis (and OPEC?) to only sell oil for dollars. That created an enormous global demand to hold dollars.

281 sats \ 5 replies \ @TomK 16 Jan

The Petrodollar was the big geopolitical thing that feed the Eurodollar market's growth, indeed. All the rest that happened on FX markets had been controlled by the military and was nothing more than a reflection of the most important source of energy: oil.

48 sats \ 4 replies \ @cryptofolyo 16 Jan

The big question is

Why OPEC needs to control the supply and demand of oil ?

280 sats \ 0 replies \ @TomK 16 Jan

To set the price and rent-seek and have geopolitical leverage.

48 sats \ 2 replies \ @cryptofolyo 16 Jan

Control Scarcity and ensure that it is a proper duplicate for Gold/ Silver which was the base of money till 1971 ?

When Nixon said no more gold for dollar immediately dollar fell down from 35 to 700 ( todays 2700 inflation adjusted )

Then switched to crude oil backing instead of gold ???

just my doubts.

27 sats \ 0 replies \ @TomK 16 Jan

That's a wide field. But Your thoughts clearly point into a proper direction

21 sats \ 0 replies \ @Undisciplined 17 Jan

It's a different form of backing, because there's no peg of a particular amount of oil per dollar. Dollar demand is just artificially inflated by the monopoly it had for use in oil markets.

270 sats \ 1 reply \ @cryptofolyo 16 Jan

Probably created a pseudo demand for oil

otherwise if the demand was not pseudo why would oil supply need to be controlled by OPEC?
Properties of money being -- Divisibility -- Scarcity -- Portability -- Fungibility -- Durability

All met by Crude oil barrels also in a limited way

Read more in my article https://bit.ly/dollarhyperinflation

10 sats \ 0 replies \ @Undisciplined 16 Jan

would oil supply need to be controlled by OPEC?

It's just an ordinary cartel. The demand is real, but the supply is artificially limited to drive prices higher.

Russian and American production undermines OPEC dramatically, but American production is good for the petrodollar. OPEC can withstand that competition, because its members have cheaper to produce oil reserves.