Did The World’s Largest Futures Exchange Enable $200 Oil?

Another nail in the coffin of USDollar hegemony.  The answer to the question is "yes."

http://www.zerohedge.com/article/guest-post-did-world%E2%80%99s-largest-futures-exchange-enable-200-oil

Since most countries rely on oil imports, they are forced to maintain large stockpiles of dollars ^2,3,4 in order to continue imports. ⁵ This creates a consistent demand for US dollars and upwards pressure on the US dollar’s value, regardless of economic conditions in the United States.  This in turn allegedly allows the US government to issue currency below cost of currency production (seignorage) and bonds at lower interest rates than they otherwise would be able to.⁶ As a result the U.S. government can run higher budget deficits at a more sustainable level than can most other countries.  A stronger US dollar also means that goods imported into the United States are relatively cheap.  It appears to be to the US’ advantage to maintain US dollar hegemony.⁷

If the denomination of oil sales changes to another currency, such as the euro, many countries would sell dollars and cause the banks to shift their reserves, as they would no longer need dollars to buy oil. ⁸ Forty years of petrodollars would start to get flushed from central bank reserves.  This shift in petrocurrency reserve status would lower the volume and velocity of US dollar recycling and thus weaken the dollar relative to the Euro.  The EU would accrue the same benefits from Euro-denominated oil sales that the US.