When the U.S. signed its 1973 agreement with the House of Saud to peg oil to the dollar, few tended to realize that the opposite would be true, and that the dollar itself is intrinsically tied to oil and the price of this commodity. It is one of the reasons why Kissinger had the Saudi’s (and OPEC) increase the price three fold so that this inflation would allow the U.S. to then increase the nation’s money supply by having the House of Saud put all of their reserves in U.S. debt instruments (Treasuries).
But as the use of debt and credit began to expand, and eventually reach exponential growth due to central banks choosing the Keynesian road over sound monetary policies, it put the dollar on a fragile precipice that then relied upon oil and other asset prices to remain high to keep the spigot going enough to be able to both roll over the growing debt, and to ensure confidence that in desired times they could increase that debt with little opposition.
However, following the Credit Crisis of 2008 confidence in the dollar began to crack, and eventually lead to an ever growing rejection of the reserve currency by nations who have been forced to devalue their own currencies to remain sustainable. And this worldwide increase in debt has not only brought about a global point of diminishing returns (see the need for negative interest rates by some), but it has also killed real economies who’s consumers can no longer spend at the rates they were over the past two decades.