The chief reason why dollars are more than pieces of green paper is that countries all over the world need them for purchases, principally of oil. This requires them in addition to maintain dollar reserves to protect their own currency; and these reserves, when invested, help maintain the current high levels of the US securities markets.

...the need to dominate oil from Iraq is also deeply intertwined with the defense of the dollar. Its current strength is supported by OPEC's requirement (secured by a secret agreement between the US and Saudi Arabia) that all OPEC oil sales be denominated in dollars. This requirement is currently threatened by the desire of some OPEC countries to allow OPEC oil sales to be paid in euros.

THINGS THAT MAKE YOU GO, "HMMM"...

]The chief reason why dollars are more than pieces of green paper
]is that countries all over the world need them for purchases,
]principally of oil. This requires them in addition to maintain
]dollar reserves to protect their own currency; and these
]reserves, when invested, help maintain the current high levels of
]the US securities markets.

]...the need to dominate oil from Iraq is also deeply intertwined
]with the defense of the dollar. Its current strength is supported
]by OPEC's requirement (secured by a secret agreement between the
]US and Saudi Arabia) that all OPEC oil sales be denominated in
]dollars. This requirement is currently threatened by the desire
]of some OPEC countries to allow OPEC oil sales to be paid in
]euros.

Interesting... long but good. I just wish I knew enough about
macroeconomics to critique his essay.