[dexzod]

I think this will have some interesting consequences. The US dollar used to be backed by gold, then Nixon ended that and then it got tied to oil, so in effect it was still backed by something tangible. The rest of the world currencies being somewhat linked to dollar were also indirectly tied to oil. Now the dollar is backed by nothing and by extension the rest of the currencies. In that sense dollar is now just a digital currency.

[advisedwang]

The price of oil varies, so the petrodollar is nothing like the gold standard, where a dollar was pegged to a specific amount of gold.

[fuzzfactor]

I would say you're both correct.

>the petrodollar is nothing like the gold standard, where a dollar was pegged to a specific amount of gold.

>in effect it was still backed by something tangible.

I expect for the foreseeable future, with a few hundred dollars you will still be able to drive your Corvette (or other pleasure craft) around for quite a pleasurable tour.

The thing that changes is the number of miles you can go according to the present asset value of your fuel at any one time.

People got accustomed to that part of it a long time ago, after Nixon sacrificed the currency to the Saudis.

With complete discharge as a petrocurrency, that could end up with some place other than the US, one which average income is abysmal by comparison, being fully able to collectively purchase more Corvettes for cash than Americans because of debt levels relative to tangible assets.