Total CEO Calls for Bigger Euro Role in Oil Payments
I’m a couple weeks behind on this one. It’s been a busy month. Recently French-owned Total CEO Christophe de Margerie made public statements about his desire to use Euros in oil transactions instead of/in addition to US dollars. At the face it sounds unassuming enough, but if Total and others begin moving away from using the US dollar in trade it means a lower demand for the dollar. That means our dollars will be worth less in the world. There will be a lower demand for our debt abroad, which means borrowing at higher rates and the potential for government debt held to come back home and cause inflation. While this one situation doesn’t exactly spell doom and gloom, there are a handful of other things going on in the world right now that are a threat to the US dollar’s hegemony in the world and the petrodollar system….and this could be one.
For as important as the petrodollar system is the US economy and as much understanding it explains things about the world economy and US foreign policy, I’m surprised we don’t hear much about it. Jerry Robinson at Follow The Money (ftmdaily.com) put out a great write-up about the petrodollar system and overall does a great job keeping up on current events that relate to the petrodollar system. Find the report here