The Petrodollar

In nineteen seventy-three, the world's currency system fractured. The United States pegged the dollar to gold since nineteen forty-four. That peg became impossible. President Nixon ended it. The dollar became fiat. Saudi Arabia, the largest reserves holder, faced a choice about oil pricing. Saudi leadership decided dollar pricing served their interests. In exchange, the United States committed to military protection. One conversation established a financial architecture binding the world. If oil prices in dollars, every nation needing oil must hold dollars. Brazil, Japan, China, Germany all needed dollars. The United States created permanent demand for its currency through petroleum.