You still didn't answer my initial question of if the US dollar is backed by nothing, how was and is the USA supposed to settle balance of payment issues with other countries being a debtor nation? The art of the unseen or implicit.
Foreign exchange market and central banks. Let's start with Carroll Quigley from Tragedy & Hope page 63:
Western Civilization to 1914
International Financial Practices
The financial principals which apply to the relationships between different countries
are an expansion of those which apply within a single country. When goods are
exchanged between countries, they must be paid for by commodities or gold. They
cannot be paid for by the notes, certificates, and checks of the purchaser's country, since
these are of value only in the country of issue. To avoid shipment of gold with every
purchase, bills of exchange are used. These are claims against a person in another country
which are sold to a person in the same country. The latter will buy such a claim if he
wants to satisfy a claim against himself held by a person in the other country. He can
satisfy such a claim by sending to his creditor in the other country the claim which he has
bought against another person in that other country, and let his creditor use that claim to
satisfy his own claim. Thus, instead of importers in one country sending money to
exporters in another country, importers in one country pay their debts to exporters in their
own country, and their creditors in the other country receive payment for the goods they
have exported from importers in their own country. Thus, payment for goods in an
international trade is made by merging single transactions involving two persons into
double transactions involving four persons. In many cases, payment is made by involving
a multitude of transactions, frequently in several different countries. These transactions
were carried on in the so-called foreign-exchange market. An exporter of goods sold bills
of exchange into that market and thus drew out of it money in his own country's units. An
importer bought such bills of exchange to send to his creditor, and thus he put his own
country's monetary units into the market. Since the bills available in any market were
drawn in the monetary units of many different foreign countries, there arose exchange
relationships between the amounts of money available in the country's own units (put
there by importers) and the variety of bills drawn in foreign moneys and put into the
market by exporters. The supply and demand for bills (or money) of any country in terms
of the supply and demand of the country's own money available in the foreign-exchange
market determined the value of the other countries' moneys in relation to domestic
money. These values could fluctuate — widely for countries not on the gold standard, but
only narrowly (as we shall see) for those on gold.
A foreign exchange market exists where there is generally enough currency available for any given nation's money that it's readily exchangeable. Back in the day of the gold standard, as Quigley points out here, any time there wasn't enough specific currency available, actual gold needed to be shipped between countries to settle accounts.
The modern day is a little different, as there is no gold-standard; currencies aren't backed by anything.
The foreign exchange market still exists. So if US Company pays CAN Company in USD, CAN Company can simply go to the foreign exchange and turn their USD into CAD. In the event that there isn't enough currency available on the foreign exchange, CAN Company can go to the Canadian Central Bank and exchange the money there. In this case, the Canadian Central Bank prints/creates new money to do the exchange, then holds USD on reserve, because they aren't able to print/create their own.
Now you asked specifically about the US government: "how was and is the USA supposed to settle balance of payment issues with other countries being a debtor nation?" The US has the option to use commodities, of which oil certainly could be one of them, but the US can pay same way that international companies pay each other: by making stuff up at the printing press and trading on the foreign exchange.
Ok 2 examples to make my point.
Would a policeman?
a) Prevent injuries to the public.
b) Prefer or appreciate more people being knifed to death.
Would a locksmith?
a) Make locks to keep horses in the stables. Cut keys etc
b) Prefer or appreciate more break ins, to provide security.
If the later they are not a policeman and they are not a locksmith.
In the same way "Guns don't kill people, I do". (Postal II)
Tools don't give value to people, people give value to tools. Behind the tool there is a fundamental desire or need, in the person.
I really don't understand what's being misunderstood here. The fact that I can use US dollars to pay taxes, and thereby prevent the violence of the state from seizing my property or throwing me in prison, makes US dollars VERY valuable to me. My preferences don't really matter.