Changes

In August 1971, [[President Richard Nixon]] ended the convertibility of U.S. dollars into [[gold]], in the face of mounting [[inflation]] and foreign [[debt]] caused by out-of-control [[Big Government|government spending]] simultaneously on social programs and the [[Vietnam war]]. This caused a run on U.S. gold reserves and the value of the dollar to free fall. On June 9, 1974, Nixon addressed this issue by signing a series of bilateral agreements with [[Saudi Arabia]], in which the latter country would use its political influence to coerce [[OPEC]] into standardizing the sale of [[oil]] in [[dollar]]s, therefore preserving the dollar's status as the global reserve currency in the post-[[Bretton Woods]] era.<ref>[https://www.investopedia.com/articles/forex/072915/how-petrodollars-affect-us-dollar.asp][https://www.fxcm.com/uk/insights/what-is-the-petrodollar/ investopedia]</ref>  

In August 1971, [[President Richard Nixon]] ended the convertibility of U.S. dollars into [[gold]], in the face of mounting [[inflation]] and foreign [[debt]] caused by out-of-control [[Big Government|government spending]] simultaneously on social programs and the [[Vietnam war]]. This caused a run on U.S. gold reserves and the value of the dollar to free fall. On June 9, 1974, Nixon addressed this issue by signing a series of bilateral agreements with [[Saudi Arabia]], in which the latter country would use its political influence to coerce [[OPEC]] into standardizing the sale of [[oil]] in [[dollar]]s, therefore preserving the dollar's status as the global reserve currency in the post-[[Bretton Woods]] era.<ref>[https://www.investopedia.com/articles/forex/072915/how-petrodollars-affect-us-dollar.asp][https://www.fxcm.com/uk/insights/what-is-the-petrodollar/ investopedia]</ref>  

The U.S. sold dollars needed for international transactions by issuing [[US Treasury]] debt, which is a universally fungible international medium of exchange. Until late 2022<ref>[[Essay: April 2022 was a pivotal moment in world politics for decades to come]]</ref> virtually all transactions for oil globally had been conducted in dollars until Saudi Arabia began accepting [[Chinese]] yuan.  This gave the U.S. an “exorbitant privilege” in that it could issue an unlimited, inflated stream of Treasury debt to the world.  One of the consequences of this arrangement is that it has allowed the U.S. to spend far beyond its means, running up $32 trillion of debt since 1980, when its [[national debt]] stood at a mere $1 trillion.

The U.S. sold dollars needed for international transactions by issuing [[US Treasury]] debt, which is a universally fungible international medium of exchange. Until late 2022<ref>[[Essay: April 2022 was a pivotal moment in the future of global politics for decades to come]]‎‎</ref> virtually all transactions for oil globally had been conducted in dollars until Saudi Arabia began accepting [[Chinese]] yuan.  This gave the U.S. an “exorbitant privilege” in that it could issue an unlimited, inflated stream of Treasury debt to the world.  One of the consequences of this arrangement is that it has allowed the U.S. to spend far beyond its means, running up $32 trillion of debt since 1980, when its [[national debt]] stood at a mere $1 trillion.

===Interest rates and capital flight===

===Interest rates and capital flight===