118. Determining the Fate of the US Dollar Part II
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oil is priced in usd. so if oil goes up it means saudi has more usd reserves. because sar is pegged to the usd when saudis need sar they sell usd to get sar as a result there is too many sar's floating around due to the peg to usd causing inflation in saudi. its not so much of sar depegging but oil being depegged. no wonder the US doesn't like iran/venenzuela/russia.
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Hi Joshrain1, Thanks for the comment. I agree that this is an issue as well but even if oil was sold in something other than USD the Saudi's would still have to deal with the fact that they have pegged their currency (which should be strengthening due to demand for oil) to the US Dollar which is weakening. I think most would agree that this would bring about inflation regardless of whether oil was priced in USD or not. Best Regards, Dave
InformedTrades 3 years ago