An employee at the Tawke oil field in Iraq's Dohuk province, part of the autonomous region of Kurdistan, in May 2009.
An employee at the Tawke oil field in Iraq's Dohuk province, part of the autonomous region of Kurdistan, in May 2009. - 
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Kai Ryssdal: The foreign exchange markets were abuzz today with what amounts to not much more than a rumor. A report in the UK newspaper The Independent that some Persian Gulf countries want to stop selling their oil for dollars. The dollar has been the oil market currency of choice for almost 40 years. Even if the news turns out not to be true, and we should say here it has already been denied by the Saudi's, it does raise this question. Whaddya suppose would happen if, or when, the dollar's no good anymore? Marketplace's Jeremy Hobson reports from New York.

JEREMY HOBSON: There are obvious benefits to having the world do business with our currency. Here's one from Marc Chandler, global head of currency strategy at Brown Brothers Harriman, and author of the book "Making Sense of the Dollar."

MARC CHANDLER: We don't have to worry about the exchange rate so much. If the dollar weakens, the price of oil doesn't really go up for Americans.

And then there's the tricky issue of the trade deficit.

PETER SCHIFF: We run these huge trade deficits, and what that means is that we're not exporting enough products to pay for the products that we import.

Peter Schiff is president of EuroPacific Capital and author of "Crash Proof 2.0." He says instead of making enough cars and computers to pay for our imports, we make dollars.

SCHIFF: One of the main reasons that our trading partners will accept dollars for their products is because OPEC will accept those dollars for their oil.

And he says where oil goes, most other commodities follow. So if countries stop paying for oil in dollars, pretty soon the greenback would lose its status as the world's main reserve currency.

Marc Chandler says that's a bunch of doom and gloom. He says the dollar's strength goes far deeper than an oil well. It's backed up by the power and stability of the United States and the dominance of U.S. capital markets.

CHANDLER: I'm not completely closed to the idea that there could be an alternative down the road for the U.S. dollar. I just don't see it happening anytime soon.

Not least because what would the new oil currency be? China's Yuan's still a baby on the world stage. And the Euro only just turned 10. Chandler says there's really no other currency with the U.S. dollar's currency.

In New York, I'm Jeremy Hobson for Marketplace.