If Russia, China, Iran, and maybe India, agree on using a stable currency such as a gold or commodity backed currency, is that the end of petrodollar?

[Adaeva]

And, And, if that happens, does the economy of the USA collapse into a depression?

[DJB72]

Libya was developing a Gold-backed currency for Africa until US forces backed by NATO "liberated" the country from Gadaffi's regime and killed him a few years ago.

The question is why?

It was a successful socialist country with a vision that would have lifted Africa out from international debt by shifting oil prices to be paid in his proposed "gold dinar" currency instead of dollars. He already pissed off the USA by refusing to buy or sell in currencies other that Euros.

[Surely]

Good question! At least you are looking forward. When you run for president. I’ll vote for you!

[RealMarek]

Yes, and this is happening as we speak. When the US took the unprecedented step of confiscating Afghanistan and then Russia’s foreign reserves, something it did not do to Germany during WW2, it lost the trust of any power that is not its ally. The pace of dedollarization has accelerated in response and treasury bond auctions have become difficult in part due to this. The fact that European currencies are in more trouble than the dollar will somewhat mask the consequences for a time as European wealth floods into dollar denominated assets. After that, the US will no longer run deficits and export inflation; it will face the inflationary consequences at home. And then it will no longer afford to project force worldwide, and perhaps not even across the domestic US.

[SnowedIn]

I love your question and your forward thinking. Not sure, though, that I see that happening. Definitely not gold. Today's economies and the world market make that impossible, to say nothing of the literal amount of gold -- there isn't enough to make that a viable proposition. Too, I'm not sure what other commodity would be able to replace petrochemicals. Maybe, just maybe, grain/food/meat. Or, perhaps even more likely, water. BUT... even in the case that there was, not sure Russia, China, India, Iran would be able to have a lock on that commodity/currency. Too hard these days to exclude the EU, Britain, and America, to say nothing of Asia and Africa. The real thing is, thought, that those nations don't necessarily want America out of the world economic engine. They may not like America or policies and politics, but they like America's consumption and they like the ability to be part of America's financial markets.

[Adaeva]

I don't know why you think a country must one all of a commodity for it to be convertible. You don't need to own all the Swiss Franks to convert Swiss Franks to dollars. You don't need to own every bit coin to convert bit coins to dollars.

The value of all the available gold in the world is about $12 trillion dollars. Owning $1 trillion dollars in gold would be more than adequate to have a gold backed currency because almost no one redeems all their currency into gold provided the country is not counterfeiting more of the currency and reducing the value of the currency which is what started doing before they went off the gold standard.

Regardless, because there had never been an honest non-criminal country, a currency must be backed by something of value or it will go to zero. See markets.businessinsider.com/.../dollar-dominance-russia-china-rouble-yuan-brics-reserve-currency-imf-2022-6 for the following:

Russia is ready to develop a new global reserve currency alongside China and other BRICS nations, in a potential challenge to the dominance of the US dollar.

President Vladimir Putin signaled the new reserve currency would be based on a basket of currencies from the group's members: Brazil, Russia, India, China, and South Africa.

"The matter of creating the international reserve currency based on the basket of currencies of our countries is under review," Putin told the BRICS Business Forum on Wednesday, according to a TASS report. "We are ready to openly work with all fair partners."

[ArtemisSilver]

It could be yes. However if the US federal reserve were to issue a bonafide USD stablecoin, and one for each of the major national central banks then it wouldn't matter and the USD would retain global reserve currency status regardless.

Assuming of course that the US military stays strong and they country doesn't just collapse into civil war because of all the culture war bullshit.

[holdem4884]

No. There isn't enough gold in the world to make this work. No other countries currency is reliable enough. Look at the dollar now, it's been soaring. When the world economy tanks everyone wants the greenback

[Anonymous]

No that will be the start of WWIII. Just take Libya, they were once one of the richest countries in Africa, then they decided to nationalize their oil while ditching the petrodollar, then boom, US over threw their government, now their one of the poorest countries in Africa full of slave markets. You threaten the petrodollar, prepare for the US military to come knocking.

[abc3643]

No. The "petrodollar" is horseshit.
Do more research please.

[Adaeva]

There may not be some spendable currency called the petrodollar. The petrodollar system is essentially the global practice of exchanging oil for US dollars, rather than any other currency. This means that no matter what country is buying the oil, they pay the oil-producing country in US dollars which means countries much buy dollars to buy oil. That has been a huge benefit to the USA.

[Anonymous]

Pretty much, the US would lose reserve currency status, it's replacement will be either the Euro or more likely the Yuen

[OddBeMe]

i think crude oil companies will be fine for time being.

[AngryCarl]

World War III will happen before that.

[KasiKesh]

we turks will rule the world ;)