Russia Is On The Verge Of Dealing A Massive Blow To The PetrodollarMichael Snyder As I will explain below, this has been a massive advantage for the U.S. economy. In recent years, there have been rumblings by nations such as Russia and China about the need to change to a new system, but nobody has really had a big reason to upset the status quo. However, that has now changed. The struggle over Ukraine has caused Russia to completely reevaluate the financial relationship that it has with the United States. If it starts trading a lot of oil and natural gas for currencies other than the U.S. dollar, that will be a massive blow for the petrodollar, and it could end up dramatically changing the global economic landscape. The fact that the Russian government has held a meeting to discuss getting rid of the US dollar in Russian export operations should be front page news on every mainstream news website in the United States. That is how big this is. But instead, we have heard nothing from the big mainstream news networks about this so far. Instead, we have only heard about this from Russian news sources such asthe Voice of Russia After all, this wouldnt just be a slap in the face. This would essentially be like slamming an economic fist into our nose. You see, Russia is not just a small player when it comes to trading oil and natural gas. The truth is that Russia is the largest exporter of natural gas and the second largest exporter of oil in the world. If Russia starts asking for payment in currencies other than the U.S. dollar, that will essentially end the monopoly of the petrodollar. In order to do this, Russia will need trading partners willing to go along. In the article quoted above, the Voice of Russia listedIran and China as two nations that would potentially be willing to make the switch And the reality of the matter is that China has seemed ready to move away from the U.S. dollar for quite some time. In a previous article, I included a quote from a French news source that discussed how Chinas official news agency has even called for a new international reserve currency to replace the dominant US dollar For much more on what China is thinking, please see my previous article entitled 9 Signs That China Is Making A Move Against The U.S. Dollar. So why is the petrodollar so important? Well, it creates a tremendous amount of demand for the U.S. dollar all over the globe. Since everyone has needed it to trade with one another, that has created an endless global appetite for the currency. That has kept the value of the dollar artificially high, and it has enabled us to import trillions of dollars of super cheap products from other countries. If other nations stopped using the dollar to trade with one another, the value of the dollar would plummet dramatically and we would have to pay much, much more for the trinkets that we buy at the dollar store and Wal-Mart. In addition, since the U.S. dollar is essentially the de facto global currency, this has also increased demand for our debt. Major exporting nations such as China and Saudi Arabia end up with giant piles of our dollars. Instead of just letting them sit there and do nothing, those nations often reinvest their dollars into securities that can rapidly be changed back into dollars if needed. One of the most popular ways to do this has been to invest those dollars in U.S. Treasuries. This has driven down interest rates on U.S. debt over the years and has enabled the U.S. government to borrow trillions upon trillions of dollars for next to nothing. But if the rest of the world starts moving away from the U.S. dollar, all of this could change. So if Russia really does pull the trigger on a de-dollarization strategy, that would be huge especially if the rest of the planet started following their lead. The U.S. economy is already teetering on the brink of another major downturn, and there are a whole host of indications that big trouble is on the horizon. For much more on this, please see the article that I posted on Monday entitled If Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Pure Hell For The United States. Just about the last thing that we need right now is for our petrodollar monopoly to be threatened. It would be nice if things would calm down in Ukraine and the relationship between the United States and Russia could go back to normal. Sadly, that does not appear likely any time soon. In fact, the Ukrainian government has already admitted that we are essentially at war, and on Tuesday six Ukrainian soldiers were killed and eight were wounded in a convoy attack in eastern Ukraine. The regions in eastern Ukraine that have just declared independence have given the government in Kiev until Wednesday to pull their forces out of eastern Ukraine or else face war. If a full blown civil war does erupt in Ukraine, it is going to take this crisis to a completely new level. Unfortunately, most Americans are incredibly apathetic at this point and know very little about what is going on. But in the end, this could have dramatic implications for all of us. This article first appeared here at the Economic Collapse Blog. Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here. 