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Joseph Adinolfi: Reports of the petrodollar system's demise are 'fake news,' and here's why
By Joseph Adinolfi
Dow Jones News Service
via Morningstar.com, Chicago
Saturday, June 15, 2024
Stories about the collapse of a longstanding "petrodollar" agreement between the United States and Saudi Arabia spread like wildfire on social media this week. But the agreement never existed.
It seemed like big news, and many wondered why the mainstream media had seemingly ignored it. Turns out there was a very good reason.
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This week reports circulating widely on social-media platforms like X offered up a shocking proclamation: A 50-year-old agreement between the U.S. and Saudi Arabia requiring that the latter price its crude-oil exports in U.S. dollars had expired on Sunday.
The collapse of the accord would inevitably deal a fatal blow to the U.S. dollar's status as the de facto global reserve currency, various commentators on X opined. Surely, financial upheaval lay ahead.
Almost immediately Google searches for the term "petrodollar" spiked to the highest level on record dating back to 2004, according to Google Trends data.
But as speculation about an imminent end to the U.S. dollar's global dominance intensified, several Wall Street and foreign-policy experts emerged to point out a fatal flaw in this logic: The agreement itself never existed.
At least not in the way it was being described in the posts that had gone viral on social media. ...
... For the remainder of the analysis:
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