by Leo Hohmann, Leo Hohmann:

The U.S. standard of living has been artificially boosted by the dollar’s status as the global reserve currency, but what happens as that status crumbles?

The 50-year-old petrodollar agreement between the U.S. and Saudi Arabia has been allowed to expire, according to multiple news reports.

The so-called petrodollar refers to the U.S. dollar’s role as the currency used for crude oil transactions on the world market. This arrangement has its roots in the 1970s when the United States and Saudi Arabia struck a deal shortly after the U.S. went off the gold standard that would go on to have far-reaching consequences for the global economy.