In the below exchange between Saifedean Ammous and Mark Goodwin, they debate the concept of the “petrodollar” and its relationship to Bitcoin and U.S. dollar inflation.

𝘔𝘢𝘳𝘬 𝘎𝘰𝘰𝘥𝘸𝘪𝘯’𝘴 𝘗𝘰𝘴𝘪𝘵𝘪𝘰𝘯:

Goodwin argues that the petrodollar is a system where the U.S. government, by controlling oil infrastructure and supply chains, forces other countries to buy oil in U.S. dollars. This creates an artificial demand for dollars, even though they are inflating.

He suggests Bitcoin could potentially replace the petrodollar system, allowing the U.S. government to manage dollar inflation and align it with Bitcoin as a scarce asset.

Goodwin also mentions that stablecoins and capital requirements (imposed by U.S. regulations) help maintain demand for the U.S. dollar in this system.

𝘚𝘢𝘪𝘧𝘦𝘥𝘦𝘢𝘯 𝘈𝘮𝘮𝘰𝘶𝘴’ 𝘗𝘰𝘴𝘪𝘵𝘪𝘰𝘯:

Ammous disputes the existence of a meaningful “petrodollar” system. He argues that pricing oil in dollars is just a convenience and doesn’t impact the demand for dollars. Instead, people hold dollars because they are the most liquid and widely accepted currency, not because of any oil-related deals.

He also challenges Goodwin’s view that Bitcoin could replace this supposed petrodollar system, stating that if people start holding Bitcoin instead of dollars, the value of the dollar would decrease.

Ammous rejects the idea that Bitcoin could be used to strengthen the dollar, emphasizing that Bitcoin is a path away from what he sees as “dollar debt slavery,” not a tool to support it.

𝘚𝘶𝘮𝘮𝘢𝘳𝘺:

In summary, the debate revolves around whether the “petrodollar” exists as a real mechanism supporting dollar dominance, and if Bitcoin could play a role in maintaining or disrupting this system. Ammous views Bitcoin as an escape from the dollar system, while Goodwin sees it as a potential tool for managing U.S. inflation. Both contest the other’s reasoning, with no real consensus reached.

𝘛𝘩𝘦 𝘦𝘹𝘤𝘩𝘢𝘯𝘨𝘦 𝘵𝘩𝘦𝘺 𝘩𝘢𝘥 𝘰𝘯 𝘛𝘸𝘪𝘵𝘵𝘦𝘳 / 𝘟 :

Mark Goodwin:

nice rip @PrestonPysh and @saifedean!

just want to be clear however, this is not part of the analysis i, and in later work, @_whitneywebb and i, make.

the bitcoin-dollar is a petro-dollar analog, not a gold-backed dollar analog.

youtube.com/watch?v=1rYg2-…

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Saifedean Ammous:

Thanks. I think my disagreement is that I do not believe there is such a thing as a petro-dollar, so I do not see how bitcoin can replace petrol in this relationship, especially that petrol and bitcoin are completely different things: petrol is bought to be burned, while bitcoin is held and then spent. The dollar is not backed by petrol in any meaningful way, and I’ve never come across a compelling explanation of how the petro-dollar is supposed to work. People mention oil sellers pricing oil in dollars as if it matters, but it doesn’t, because it’s just a denomination. What matters is what people hold in reserve, because that’s what gives money value, but people choose to hold the money that is most liquid, because that’s the point of money. Treasuries and USD are the largest and most liquid market, so central banks and large financial institutions hold treasuries and dollars. This then means most oil sellers, like all sellers of large goods on international markets, prefer to hold dollar assets. I’ve read several of your articles on this and must say I have not found a compelling explanation. Please let me know if you can elaborate on this.

The reason this matters more than just quibbling over details is that it clarifies what the relationship between the USD and the dollar is. You seem to imply that bitcoin will allow the USG to carry on with more inflation, because the bitcoin-dollar replaces the petro-dollar. I don’t see how this can be the case. If the USG backs the dollar by bitcoin, they have killed inflation. So I’d like to hear how you see this working practically.

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Mark Goodwin:

obviously the petrodollar exists. not about a peg. it is about exporting demand for otherwise inflating dollars by leveraging infrastructure and supplychain control over the underlying, demanded asset to impose a de facto monopoly in dollar denomination, increasing dollar demand.

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Saifedean Ammous:

I don’t find this obvious at all. I’ve been studying this for a while and fail to see the logic. Please elaborate: How does “leveraging infrastructure and supply chain control” ‘export demand for dollars’? How does that increase demand for dollars? How is there a monopoly on denomination? How can that be done with bitcoin?

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Mark Goodwin:

us goes off gold standard. create military/political pacts to make industrializing countries in eurasia need to buy dollars before they can access petrol. this exports demand for an inflating dollar. it is a de facto monopoly by capturing the largest supplier. with stablecoins.

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Saifedean Ammous:

But no such pacts exist nor are they enforceable. Entirely possible for France to pay Kazakhstan for oil in Euros. What would happen if a Kazakh oil seller took Euros from a French importer? It’s not illegal anywhere. The demand for dollars has nothing to do with oil, it’s because it’s the biggest money. Also, stablecoins are not bitcoin. Stablecoins will clearly increase demand for USD but that’s got nothing to do with bitcoin

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Mark Goodwin:

it is a _de facto_ monopoly

>What would happen if a Kazakh oil seller took Euros from a French importer?

idk what happened shortly after Iraq started selling oil for euros in Fall 2000?

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Saifedean Ammous:

There’s no monopoly, just like gold didn’t have a monopoly. Money wants to be one and that one is the most liquid and most salable good. People also trade most other goods for dollars, and that’s not because of any monopoly, but just monetary economics. Iraq selling oil for euros was a meaningless stunt that cost them money, and had nothing to do with the war on Iraq, which was just another episode of Israel using its American meat puppets to die fighting their wars.

Still, you are offering no explanation whatsoever on how this is in any way related to bitcoin. Even if I were to hypothetically accept your petrodollar thesis, how exactly will USG force a de facto monopoly on buying bitcoin with dollars only? And how would this support the dollar’s value or increase demand for it? What matters is what people hold in their cash balances, and if they’re selling their dollars to buy bitcoin, that means the dollar goes down and bitcoin goes up.

I’d like to respectfully ask you to consider the alternative hypothesis that you’re engaging in motivated reasoning to arrive at a foregone conclusion. Consider that by doing this you’re turning people away from bitcoin when it in fact is the only thing that can save them.

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Mark Goodwin:

ask Howard Lutnick to explain how capital requirements enforced by the US regulatory regime increase demand for dollars for entities wanting to hold bitcoin on their balance sheet.

>I’d like to respectfully ask you to consider the alternative hypothesis that you’re engaging in motivated reasoning to arrive at a foregone conclusion.

quite an accusation saif

>Consider that by doing this you’re turning people away from bitcoin when it in fact is the only thing that can save them.

telling people that bitcoin is the only thing that can save them is far from a fact, and is far more of a blackpill/doompill than anything ive ever said.

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Saifedean Ammous:

Financially, Bitcoin is the only way out of dollar debt slavery. That’s a huge white pill. Portraying Bitcoin as a way to strengthen the dollar is both wrong and a doompill. You’ve not convinced me of this idea at all

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Mark Goodwin:

it is a method for the US gov to debt pardon and inflate an artificially demanded dollar via capital requirements into a scarce capped asset. they only need to do this once. the leading nominee for the presidency is literally proposing this idea.

thanks for the discourse saif.

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Saifedean Ammous:

There’s no such thing as inflate into an asset, or Venezuela could’ve saved their Bolivar by inflating it into dollars. They can buy bitcoin, destroy the dollar & lose money printing privilege, or ignore bitcoin & hfsp & also destroy the dollar but a little later.

Thank you for engaging 📷

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@markgoodw_in

@saifedean

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