Interviewed Tuesday at Bloomberg, Saudi Arabia Finance Minister Mohammed Al-Jadaan indicated that Saudi Arabia would be open to conducting trade, including involving oil, in various currencies — mentioning in particular the euro and the Saudi riyal — instead of the United States dollar. This is the latest in a series of developments suggesting the Middle East nation and large oil producer is shifting away from supporting US dollar hegemony through trade.
In February of 2006, then US House of Representatives member Ron Paul (R-TX) discussed the history of US dollar hegemony and its looming doom in a House floor speech titled “The End of Dollar Hegemony.” Paul began his speech with his assessment that the dollar dominance, called dollar hegemony more recently and dollar diplomacy in earlier decades of the prior hundred years, “is coming to an end.”
The full history and analysis Paul related in the speech is fascinating. But, there is a particular portion of Paul’s speech that relates to the Saudi finance minister’s comment. This is when Paul focused on the key role the trade of oil has played in supporting dollar hegemony and the related position of the US dollar as the world reserve currency.