William Simon Establishes Petrodollar Recycling System

| Importance: 9/10 | Status: confirmed

US Treasury Secretary William Simon negotiated a pivotal agreement with Saudi Arabia that established the petrodollar recycling system, fundamentally reshaping global monetary dynamics. Simon convinced Saudi Arabia to sell oil exclusively in US dollars and invest oil revenues in US Treasury bonds, creating a mechanism that would sustain US dollar global dominance for decades. This secret diplomatic and financial arrangement ensured Saudi oil profits would be reinvested in US financial markets, military equipment, and government securities.

Key Actors

William Simon Ahmed Zaki Yamani Richard Nixon King Faisal Henry Kissinger US Treasury Saudi Arabia

Tags

petrodollar-system monetary-policy oil-politics financial-system international-finance

Sources (3)

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