Golden Question? Is The Petrodollar The Next Thing to Break?

The comments below are an edited and abridged synopsis of an article by Matthew Piepenberg

As noted throughout 2022, the Fed’s overly rapid and overly steep rate hikes would only work until things began breaking. Now things have clearly begun to break, including the petrodollar.

Golden Question? Is The Petrodollar The Next Thing to Break? - BullionBuzz - Nick's Top Six
Oil price cap concept. Petroleum, petrodollar and crude oil concept. Oil pump on background of US dollar. Dollar and oil pumps

Even prior to recent headlines regarding US regional banks, credit event stressors were already tipping like dominoes around the world, from the 2019 repo crisis and the 2020 bond spiral to the 2022 gilt implosion.

Then came Silicon Valley Bank et al in 2023, and the forewarned disaster at Credit Suisse.

But we were also warned from day one about the sanctions against Putin, and that the oh-so-critical petrodollar would be among the next dominoes to tip, and tipping is precisely what we see.

The petrodollar shift is yet another headwind for US Treasuries and US dollars, but an obvious tailwind for gold.

Up for discussion: The bond market; less credit, less growth, more volatility; the Fed’s generational sucker punch; why disinflationary forces and a rising US dollar will be transitory; a pivot will come; all roads lead to gold; the OPEC factor—history rhyming, gold shining; gold and oil—ready to link; Powell is no Volcker; the oil nations aren’t stupid; and something to think about.

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