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The US economic collapse could only occur if there was a sudden switch to euros amongst almost all oil producing countries, yet this would more likely be a gradual process. Markets prefer stability, having oil traded in two currencies adds uncertainty where previously there was none. Also there are no guaranteed economic benefits to any country that switches.

Even if all of the oil producing countries decided that they hated the USA so much that they'd be willing to switch, the impact may not even be that big. The benefits to the USA of having the dollar as a big reserve currency are ridiculously small - something like 0.5% of US GDP. If the euro became the reserve currency of choice and the dollar sunk then US goods would become dirt cheap to foreigners and this would easily offset any losses.

I'm certain there's some sinister, hidden reason why the US invaded Iraq but I'm not convinced by the petro-dollar theories.

Posted By: pat_abb, Apr 13, 01:08:20