I missed this news story at first, but it caught my eye yesterday. I think it's interesting that the news more or less has ignored this story, because it's huge.
Of cause some of the oil from Saudi Arabia still will be sold in US-dollars, but it might only be a minor part of the oil. The rest will be sold in EUR, YEN and Chinese RMB etc.
As the article says, it has been one of the corner stones in the US economy and this corner stone has now been removed. It doesn't necessary make the card-house fall, but it makes it much more vulnerable.
Over the last few years, we have also seen a decline in other major countries buying Treasury bonds. A role that the Federal Reserve has taken over instead, but it does weaken the US-dollars position as the main reserve currency. Losing the position as the main reserve currency will weaken the US in the long run and heightens the risk of global tensions in the years to come.
I'm not convinced, that the US will be willing to give up its status as the global power number one without some kind of fight.
I do expect that the coming years could bring about a major upheaval, that will shift the status of the US as the largest global power to someone else, but it will not be a smooth transition, that's for sure.
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