Krugman argues that the issue is a crock:
http://www.wws.princeton.edu/~pkrugman/oildollar.html
His argument looks right to me.
He plays it down a bit too much I think. We've borrowed immense piles of money in dollars with no currency risk. The Fed could run the printing presses around the clock, and the creditors would just have to live with it. It's not a bad deal.
Doug
