Hi Unclescroodge,
I think I know where you're going with this so I'll try to answer appropriately.
Let's assume that the US is a NET exporter of Oil (They're a net importer in actual fact). The countries that would be buying oil from the US on a net basis would be using dollars to pay for this oil. Dollars that at some point would have been created (inflation) by the Fed and then found their way onto the balance sheets of foreign countries and held as foreign reserves, as in the case of China.
The original inflation would have occurred when the Fed created additional dollars, however, the price effects of this inflation might not be evidenced for many years.
The only thing preventing the US from having massive CPI based price hikes is the fact that foreign governments are still willing to retain US dollars as reserves, when this changes and they dump the dollar they'll have to buy assets in the US, at this point all hell will break loose and prices will skyrocket.
For the second part of the explanation, let's assume that the US was a net exporter of oil and also had a trade surplus, in this case, foreigners buying oil from the US would not have US Dollars in their reserves, they would have to pay for oil with their own local currency, this would result in foreign currency being held by the Fed/Treasury as reserves and would not lead to an expansion of the monetary base.
Furthermore, it makes no sense for a country to export in perpetuity without importing, running a trade surplus like China does makes no sense at all.
The ideal situation would be imports and exports perfectly offsetting each other, this would have a net nil inflationary effect.
This is how I understand this dynamic, if I'm wrong then I'm happy for other to jump in an correct me
Cheers
Ivan
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