What if oil weren't priced in dollars?

I say we go with kwatloos. That way we'll be in good shape to transition to the Interplanetary Monetary Fund when the aliens are ready to start trading with us.

The problem with shifting away from the dollar (on the global markets) has always seemed to me to be more a symbolic concern than a realistic economic concern. The people who tend to be adamant dollar supremacists tend to believe so simply because, hey, it's American, and gotdangit, it ought to be the best in the world. In such limited worldviews, it's pretty hard to explain the pros and cons of the dollar being the global trading currency.
The real issue trickles down to this; that though America is the world's largest economy, it is no longer the massive powerhouse that dictated global policy during the Cold War era; a time, we ought to remember, of an economically-crippled, war-torn Europe; under-developed (and not really developing) African and east Asian economies, and the backwardly-industrialized Soviet bloc. It is also important to remember that at that time, America actually produced things other than over-priced, fuel-inefficient automobiles.
Should the world switch away from the dollar tomorrow? Absolutely not. Is it such a bad thing, if it happens down the line a few decades, as America has come to terms with it's current standing in the global economy? Probably not either.

Understand that Fisk is highly anti-American, that he lives in Lebanon and regularly excoriates America for its military and cultural hegemony. Few things would please him more than the dollar's demise and the end of America's dominance. He sometimes does a good job as an investigate reporter, though his work is so blatantly biased that it's often more of a screed than journalism. So take anything he writes with about a hundred grains of salt. (If you follow Fisk at all, note his very next piece is about how this change will harm Israel. That's his main thing.)

That said, remember when Brad Setser was writing about China's $1T+ dollar position - when as you note people were talking about the supposed risk of China dumping the dollar. How many $$$$$$$$$$$$$ does China have now? Lots more.

The Gulf is much less exposed to dollars - more like $$$$$ - and l agree that shifting away from the dollar is inevitable and not a bad thing (because it won't happen overnight).

[...] ce document est là pour prouver leur affirmation : c’est moche. Nul doute que le dollar n’ait plus l’aura [...]

Fisk is anti-american? Give me a break. A typical line by those who choose ignorance over reality. Fisk is anti-corruption, anti-rhetoric, and most importantly, the antithesis of those who obfuscate reality with highly partisan and self-serving politics, such as the nepotistic neo-conservatives and looting-liberals. He manages to cut through the BS, and relate stories from human perspectives, with a (relatively) objective lens. In other words, Fisk embodies the core values of the founding American fathers who sought to build a society free of those corrupt elements present in the British system of the day. That is extremely PRO-American.

Sheesh.

I propose we transition to Space Cash for all international trade going forward. After all, Space Cash is only worth what we as a planet decided it is worth.

[...] by 2018 and start using a basket of currencies instead has caused quite the big stir today.Source:http://curiouscapitalist.blogs.time.com/2009/10/06/what-if-oil-werent-priced-in-dollars/ Publicado por Aaron en [...]

So it sounds like weaning the world off dollar dependence is a good thing overall for us:
1) the US will have to slow, then stop deficit spending, because the interest rate will be too high to afford. We will actually have to pay for the programs we want.
2) If imports are not cheap, then domestic goods are relatively cheaper, giving a boost to US manufacturers.

Is it not in our interest for our government to work with these countries to encourage a comfortable transition to a global currency basket including the dollar, rather than passively fretting about whether we will be left behind?

[...] http://curiouscapitalist.blogs.time.com/2009/10/06/what-if-oil-werent-priced-in-dollars/ a few seconds ago from web [...]

Fisk is explicitly against what he has bluntly described as American military and economic hegemony. If you want to describe that as pro-American, your choice.

As a note, I've read almost everything he's ever written. He's often interesting, sometimes gets stories others don't - almost exclusively in the Arab world, where his contacts are - but he is an advocate with a particular perspective that often crosses into him wanting a result and thus massaging the message to get there.

So your argument that this is good for the US is basically because with a strong dollar
1. the dollar's value is inflated, imports are cheap and our exports are expensive
2. the strength allows the U.S. government (and until recently the private sector) to get away with wildly unbalanced budgets without paying an immediate penalty in higher interest rates

I don't see how decreasing the value of the dollar is net-good for Americans. Yes, there could be bright spots and maybe its good for the rest of the world, but if I live in America, and my government forces me to use its Fed Reserve currency, that ain't good for me. I think you a proposing a slow, controlled loss in value of the dollar. For the past ~109 years we've had that... the value of the dollar has decreased by I think something like 95%. Has that made us better off? How much more devaluing of the dollar do you think will be better?

Let me respond to both your points:
1. First of all the US no longer produces anything to export, and in order for us to recreate industry here we are going to need to rely on importing a lot of imported raw materials and people. That's going to take a long time to develop in the US. China can only now appreciate the value of its currency as its citizenry builds wealth. The two go hand-in-hand. This only came after the Chinese were able to build a strong productive economy. We are not going to have a productive economy for a long time after the dollar value is decreased. This will destroy the savings of most average Americans and certainly cause social unrest.
2. Future inflationary policies will encourage greater government debt NOW because this will decrease the value of the debt in the future. The more debt we have, the more inflation will be the only way to eliminate that debt. Do you honestly think that if we lose our value in the dollar, that somehow this will suspend government spending? If we were really looking to control government spending with interest rates, the Fed has every right to do so without making those decisions contingent on the value of the dollar. In fact, the crisis, and outflow inbalances are precisely because the Fed & associated CBs kept rates artificially low.

[...] Source:http://curiouscapitalist.blogs.time.com/2009/10/06/what-if-oil-werent-priced-in-dollars/   [...]

[...] Oct. 7th, 2009 at 8:02 PM Robert Fisk's report in the Independent that the Persian Gulf countries are planning to stop pricing oil in dollars by 2018 and start using a basket of currencies instead has caused quite the big stir today.Source:http://curiouscapitalist.blogs.time.com/2009/10/06/what-if-oil-werent-priced-in-dollars/ [...]

[...] The meaning of Robert Fisk’s report on the Persian Gulf and the dollar - The Curious Capitalis... [...]

cowrie shells anyone ?

tbh, the smartest move for everyone would to be look at SDRs as a family bucket ... hold the dip.

However, this would need to see a number of things happening, including a rebalance of weightings in SDR away from USD & also China floating the yuan on open exchange terms.
Neither looks likely in the short term, si I'll invest in a KFC bucket instead.