What is keeping OPEC countries and Russia from demanding gold as payment for their oil? It would seem that it would be the most stable form of currency given the volatility of fiat currencies. I can understand why some Arab countries want to continue the status quo given that they probably have security guarantees from the USA. But what about Russia, Iran, and Venezuela which are not so dependent and are antagonistic to the USA? If they wanted to hamstring the US empire, which seems evident, they would just need to collaborate and all take gold as payment. The inherent stability of gold would then be tempting to the other governments who chose to stick with the inflationary dollar peg. But once gold is the new reserve currency, the dollar would plummet and the US government would have to return to balanced budgets because it could no longer export inflation and become a humble country once again. Any thoughts?
Well, this is just a theory of mine (which I can’t necessarily back up by references), but I think the fact that we send money and weapons to some of these countries (with Saudi Arabia getting a significant amount) might have something to do with it. If I were the leader of one of these countries, I wouldn’t want to hamstring one of my largest customers, thereby causing it to be unable to send money and weapons my way.
These countries do not want that. Our economies and interests are so thoroughly tied together (even the ones we attempt to isolate) that the better bet is for them to continue to buy our debt and prop up the dollar despite the risks. A thoroughgoing collapse of the U.S. economy would benefit very few players, certainly not the ones with the most influence, nor the ones that have the means to bring such a result about. China and others will continue to support our debt even if it comes at a loss because the alternative would very likely be much worse.
All governments are in the business of printing money, not just the United States. Countries that export oil don’t care about stable currency as such as long as they are free to raise prices to compensate for the decline in purchasing power of the currency they do accept as payment. The countries that want to “hamstring” the United States will just accept payment in euros or yen or rubles or whatever. Iraq switched to euros in 2000. Iran switched to euros and yen last year if I’m not mistaken. I’ve become convinced this is the real motivation for the invasion of Iraq and the current belligerance toward Iran.