Here is a related situation. China produces masses of goods for Americans which is bought from the source in yuan at a fraction of the US dollar. Since America is the big consumer and has the largest demands it benefits the Chinese to keep the dollar strong to maximize yuan profits. The more money the Americans put into the Chinese the more valued the yuan becomes in relation to the dollar. One strategy China is pursuing to help keep the dollar high is to reconvert the yuan into dollars and put the money into savings. Effectively removing the money from circulation and supporting the dollar. Last I read China had holdings of American dollars in the neighborhood of $600 billion dollars which is like 3.3 trillion yuan. So it really has nothing to do with American interests and everything to do with supporting an industrial boom within China. Canadian natural resource exporters are little different, as the Canadian dollar goes up the return from oil and natural fiber (forest products) falls significantly and it puts us in an uncomfortable situation to say the least. Create new markets or continue feeding the elephant at a loss in our pockets? Normally when the dollar is low Canadians can profit from exploitation of natural resources unfettered by economical philandering.
A simple arrangement that is mutually beneficial is usually adopted.
I think that the same is true of the oil standard, the American dollar is used because it is strong, in surplus and of good value, it is like a stock in a way. The Saudis believe that America will have a strong future so it makes sense to hold onto its dollars. Or it could also just be that American's domination of almost all trade markets and political organizations gave them an exceptional advantage over other nations. For America the benefit is that dollars are in demand as they are being traded daily for huge amounts of oil creating a similar shortage in Saudi sovereign wealth funds that China is able to produce by currency exchange and savings.
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