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If Oil prices drop, the oil exporting countries don't earn enough dollars to invest their dollars in foreign banks. This means the united states has no dollars to cover their trade deficit as well as other countries, because remember the banks loan out 10 dollars for every dollar (I believe.) and this means we cant buy oil from oil exporting countries in dollars because the bank couldn't loan us dollars. My theory on the Petro Dollar Recycling system: is it accurate?