- Petrodollars are not a real currency—they’re simply U.S. dollars being used to trade oil.
- The switch could have wide-ranging implications on not just a macro scale but also investment portfolios.
The U.S. dollar is still thew world’s reserve currency, but it’s dominance is slipping.
- OPEC and BRICS nations (Brazil, Russia, China, India, and others) are either accepting yuan in lieu of the traditional petrodollar or are seriously considering it.
- Russia is diversifying away from the U.S. dollar and stocking up on gold.
The implications of the dollar potentially losing its status as the global reserve are numerous.
- Currency risks, tanking treasury bond demand, and increased interest rates are major side-affects.
- Gold would become a far more attractive option as a significant decrease in the value of the dollar would catapult gold prices.
Click here to see more of the impacts from the collapse of the petrodollar.