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Oil is literally the blood of an economy. Wild oil price changes have adverse affects on an economy. Since all oil is traded in dollars, then any change in dollar value has no adverse effect on domestic oil prices. In that discussion, the dollar dropped from $0.82 to $1.25. That is a 50% valuation change. Therefore oil price changed 50%? Not in America. It changed in other currencies because, again, all oil is traded in dollars.
As Milton Freidman (Nobel Prize winner and a strong advocate of Reagan economic policies) even noted on Charlie Rose, the current president is spending wildly and destructively which is why tax cuts are not helpful. This has caused massive dollar amounts in other nations - that may even contribute to inflation problems in other nations. Why then would these nations (ie oil economies) want to sell oil for dollars that will only drop more in value? Why would they want dollars that will only drop in value due to uncontrolled 'drunken sailor' spending by this president?
IOW shifting oil sales to another currency would (according to economists) be another downer to the American economy. It would only make your bank accounts worth significantly less. No longer would other nations need dollars to lubricate their oil sales. Just another reason for further dollar dropping.
It’s not so much that each dollar drops in value. Using another currency for world trade would cause the dollar's value to further fluctuate destructively. Currency fluctuations are not healthy for an economy.
One reason why the dollar has been so stable: all oil is traded in dollars. A world isolating or protecting itself from an uncooperative and less stable US, well, even today's launch of Galileo is but another example of currrent world opinion.
I'm not sure why the author considers no M3 reports destructive. Normally such reports are not manipulated for political purposes. Federal Reserve is traditionally independent of the Presidency. But then I don't understand why the Fed would no longer provide an M3 report.
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