You still seem to assume that the dollar is special, regardless, that the price of oil would just adjust itself to the falling dollar. According to the economists in this documentary, the price of oil would remain the same for everyone else in the world whose currency does not tank. Americans (and those who still had their dollars) would be, basically, fucked.
I'm sure there's more to it than that but I think your statement ignores the fact that rapid currency devaluations have real world consequences. It's not as if when the Brazilian real went down 75% against the dollar that somehow they could still pay the same amount for stuff. No, suddenly everything got a lot more expensive!
and then you are further suggesting that the oil cartels decide to set their prices in euros.
and then you are suggesting the cost per barrel goes up to 60 euros from 47.43--or a 26% increase from today's prices.
sure, that all could happen. in fact it really already did, except for the oil sheiks deciding to denominate oil in euros. over the last 4 years or so the $1 has fallen from, I think, something like 1.25 euros to .85 today. That is larger than the continued fall to .67 euros that you suggest.
furthermore, wasn't a barrel of oil something like $25 four years ago--whatever, I think it's up 100% ish, quite a bit more than the 26% you suggest.
so Americans have a big increase in oil prices--124%. Europeans have a smaller increase since the euro is stronger against the weaaker dollar. $25 was 31.75 euros, $56 is 47.43 euros, only a 49% increase for Europeans.
So go back to my original post, which was money is fungible. I wasn't saying currencies don't adjjust,,,,they of course do. And that adjustment in fact makes all of the outcomes that you describe happen--not only in your suggested case, but in the last four years. It doesn't require the oil cartels to price in Euro's.
