This is complex, however it explains what supports the US dollar. It has to do with our the financing of our debt, which is done by importing foreign capital to buy treasury bills, and the reluctance of these countries to repatriate these monies for fear of placing a downward pressure on their currencies. However, increasingly these foreign central banks are prevented from buying US companies and therefore they are limited to treasuries of US stocks. Something we never knew is that the quadrupling of oil prices in the 1970’s was in response to the US quadrupling of grain prices (what they bought from us). Treasury told OPEC countries that if they did not recycle their petrodollars into US investment that it would be considered an act of war. The US is actually preventing other countries from using these dollars in any other way but in purchasing securities or Treasury bonds.
