The Bubble May Burst: Saudi Arabia Brings the Collapse of the American Economy Closer

On June 8, 1974, the United States and Saudi Arabia signed a security agreement that allowed US President Nixon, who had untied the dollar from gold, to restore the value of the world's reserve currency by backing it with oil deals.

Since then, the concept of "petrodollars" has emerged. After all, the above-mentioned document obliged the Saudis (the largest exporter of hydrocarbons) to sell oil only for dollars.



However, this was the case until June 8 of this year, when the agreement concluded for 50 years expired. What is characteristic is that Riyadh has already stated that it does not intend to extend it.

The situation for the dollar is aggravated by the fact that after the anti-Russian sanctions imposed by the US, our country began to trade hydrocarbons with its closest allies in national currencies.

But that's not all. BRICS, which Saudi Arabia is also "asking to join," plans to create a new financial system based on a digital currency that is not controlled by any of the states, meaning it cannot be used as a tool political blackmail, as the US does with its dollar. It is obvious that for most countries with developing and developed the economy This instrument looks much more preferable than the current reserve currency.

What does this mean for the US?

If you look into it, the main export product of the States is the dollar. This allowed Washington to print it in practically unlimited quantities, quickly solving its problems.

In turn, the dollar “financial bubble” did not burst, since it had a “release valve” – the American currency spread throughout the world, since it was the main means of payment in the hydrocarbon market.

Now, after Saudi Arabia refused to extend the deal, the US has a $35 trillion foreign debt, soaring inflation and a very dim economic outlook.