The end of the petrodollar

Is it just me, or are we witnessing the end of the petrodollar?

To understand today's chaos, you have to understand the deal the US brokered in the 1970s. Before then, the dollar was backed by gold, but by 1971, reserves ran dry. President Nixon then decided the currency would be backed by something everyone desperately needed: oil. A pact was struck with Saudi Arabia: they would sell crude exclusively in dollars, and in exchange, Uncle Sam would protect them with the world’s strongest military. Thus, the petrodollar was born. The greatest magic trick in modern economic history

This system gave the US unique superpowers. Imagine being the only neighbor with a money-printing machine and convince everyone else they must use your paper to buy food. For decades, America has consumed far more than it produces. They simply print green paper at no cost, and the rest of the world hands over real resources, technology, and goods in return. Furthermore, they’ve exported their inflation. When Washington over-prints, prices don't just rise in the US. They rise globally because everyone holds those dollars

Essentially, the world has been funding the American party while financing its infinite debt. This "free money" was great for consumption, but it caused the US to neglect its own industry (aka deindustrialising), turning its economy into a casino of financial bubbles

But beware, because this system has a golden rule that cannot be broken: oil is sold in dollars or you face the consequences. If you review recent history critically, you will see that it is almost never about democracy, but about controlling the global toll. In 2003, Saddam Hussein moved to sell oil in Euros. Shortly after, Iraq was invaded. In Libya, Gaddafi’s push for a gold-backed African currency ended in regime change. Today’s villains, Venezuela and Iran, committed the same sin: selling energy to China in Yuan. By breaking the dollar’s exclusivity, they pose an existential threat to Washington

Why? Because if the system collapses, trillions of dollars in foreign banks would flood back home, seeking to be exchanged for real assets. This "tidal wave of paper" would trigger hyperinflation, vaporizing the American standard of living. Tech giants would lose their trillion dollar valuations, and the State would have to default, because they would not be able to pay their debt with more debt. This explains the current desperation and erratic behaviour. Trump presidency seems a tragic attempt to resuscitate a corpse with brute force

But it may be too late. The sickness began with the abuse of sanctions during the 2010s, entered a deep coma in 2020 when the FED printed trillions to mask the pandemic, and the heart stopped beating in 2022 when they froze Russia's savings, shouting to the world: "Your money is only yours if I like you." 

As of March 2026, trust, the system’s only foundation, is technically dead. Time to build a new system that doesn’t require a gun to your head to function