Yesterday I posted this https://todon.eu/@jd/116357591067448343 Shanaka Anslem Perera Tw/X essay about the 1974 Kissinger deal with the Gulf Arab states to buy US Treasuries.

Today Bloomberg media reports the same...
/jd

The Iran War Just Broke the Petrodollar (Bloomberg)
https://archive.ph/20260406041307/https://www.bloomberg.com/opinion/articles/2026-04-06/the-petrodollar-loop-supporting-the-treasury-market-is-broken
– 'The virtuous loop that has seen America underwrite stability in the Middle East in exchange for Gulf states recycling their dollar revenues into US Treasuries has been broken.
The understanding traces back to 1974, when Henry Kissinger struck one of the most consequential financial deals in modern history. Saudi Arabia would price its oil in dollars and park the surpluses in US assets — Treasuries above all. Other Gulf states followed. In exchange, America provided security guarantees and a stable global order.

The arrangement was elegant in its circularity: Oil consumers paid dollars for energy, those dollars flowed to Riyadh and Abu Dhabi, and from there back into Washington’s debt. For 50 years, this petrodollar loop quietly subsidized American borrowing costs and cemented the greenback’s role as the world’s reserve currency.
The US-Israeli war with Iran has fractured this arrangement — at both ends...'

#UKpol #USpol #EUpol
#Capitalism #Dollar #Euro #Currency #Kissinger