The most dangerous time since the Civil War

[Kinser79]

I don't know that a formal default would even be necessary. Simply removing the oil-dollar link would suffice in constraining governmental spending. Europeans don't need dollars except to buy oil and things from other people who also want to buy oil. The Japanese don't need dollars except to buy oil and buy things from other people who want to buy oil. The same is true of the Chinese, and every other people on the planet.

Thus, if just a few major oil exporters unlink their oil to the dollar, or accept other forms of payment (say Yen or Euro or gold or bitcoin or anything else) then the petrodollar is inevitably weakened. Should this happen in a death by a thousand cuts it could take as long as 20 years to happen (which would fit nicely with my Mega-Crisis saeculum theory) and by which time US bonds backed up by the FED printing press would essentially be downgraded to junk status.

When that happens, unless the US suddenly becomes a major manufacturing center again then there will be no reason for anyone to want to hold dollars if they can buy oil in something else. Indeed such a situation would lead to sanction breakdowns, and of course the end of Pax Americana which is primarily backed up by the USN and the US nuclear arsenal.

Suffice it to say that a federal government unable to sell bonds is going to have difficulty paying for the Navy let alone giving a universal basic income as the regressive left has been floating around these days.

If we are lucky we'll have a Soviet Style collapse once most people realize that the system can't and won't provide for them in the manner we are accustomed to. But then again I prefer hard and fast to slow and drawn out.