• The virtuous loop that has seen America underwrite stability in the Middle East in exchange for Gulf states recycling their dollar revenues into US Treasuries has been broken. • Foreign central banks have been net sellers of Treasuries for consecutive weeks, with holdings at the Federal Reserve Bank of New York dropping by roughly $82 billion to $2.7 trillion. • The US-Israeli war with Iran has fractured the petrodollar loop at both ends, with oil-importing nations selling Treasuries to limit depreciation and Gulf producers unable to export oil due to the Strait of Hormuz closure.
Yesterday I posted this https://todon.eu/@jd/116357591067448343 Shanaka Anslem Perera Tw/X essay about the 1974 Kissinger deal with the Gulf Arab states to buy US Treasuries.
Today Bloomberg media reports the same...
/jd
The Iran War Just Broke the Petrodollar […]
[Original post on todon.eu]