The Billion Dollar Question: With the cheap oil prices, what happens to excess foreign dollar reserves?

dwalters Sun, 12/20/2015 - 18:43

The petrodollar system - which supplanted the international dollar gold standard - requires that oil be purchased in US Dollars.  However, with the price of oil dwindling, foreign dollar reserves need not be spent solely on Texas Tea.  Certainly, it'll be burning holes in pockets.  So, where will the money go?

If it begins landing back home, a Dollar won't be worth a Continental.

Meanwhile, silver seems very attractive.

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TheTaoistTroll's picture

Save it for a rainy day

Those who are; are those whom are not.

Polly Graff's picture

if they're smart... the $ will go into solar...which will help push up the silver prices too.

Polly Graff

Debbie's picture

have reserves would spend it on their own debts/infrastructure if they don't need it to buy oil.  There are probably lots of good uses they could put it to.  Couldn't they convert it to their own currency and use it that way, or would they benefit more by spending it here?

Liberty brings people together - Ron Paul