To rehash your argument, as I understand it, the Fed's lowering of interest rates increases the incentive to borrow from the Fed. This 'borrowed' money is not so much borrowed, as it is conjured out of the ether, which increases the supply of dollars. This increase in the supply of dollars devalues existing dollar assets, which gives the holders of these assets an incentive to exchange them for oil, in order to insulate themselves from dollar inflation.

The primary flaw I see in this argument is that it implies the purchase of excess oil, which will need to be stored somewhere. This is problematic because the buffer capacity for excess crude is fairly small compared to the rate of consumption. National reserves are typically measured in days or weeks, so there is not enough buffer capacity to hoard an appreciable quantity of oil. The excess capacity would be filled within a matter of weeks or months, after which the hording would no longer be a significant market force.

Secondarily, any concern over the risk associated with holding dollar assets for future oil purchases could easily be mitigated by purchasing 'long' oil futures contracts, which would guarantee a fixed price for the oil. This would effectively insulate the holder of dollar assets from helicopter Bernake's policies and concurrently solve the storage problem.

There is no doubt that the increasing supply of dollars is affecting their purchasing power, which is likely reflected in oil prices as well as the value of the dollar relative to other currencies. If the objective is to shield the value of assets from inflation, it would be much more straightforward to dump the dollar for the Euro, which also can be used to purchase oil.

If this were to occur on a large enough scale, the relinquished dollars would measurably increase the supply in circulation, further devaluing the dollar. This in turn would prompt other dollar holders to exchange them for something else. Once this positive feedback cycle begins, it is likely to result in a complete dollar meltdown. The big institutional holders of dollar assets know this and are looking for some way to quietly dump their dollars without triggering a panic.

to buy some oil for example, so there is an increased demand, so the price of oil goes up, so the exporters fear they gonna end up with too much worthless dollars in the hands, so they are thinking of switching to the Euro and other currencies, which additionally motivates every one to get rid of the dollars,

1) Oil is priced in dollars NOT necessarily traded in dollars.
2) Big players can get rid of dollars just as easily by selling them elsewhere. The idea that they can dump them on oil producers depends on the assumption that oil producers put a different value on the dollar.
3) The basket of currerncies idea only refers to the oil price, not to the currency it is traded in - it makes no difference.

I tried to explain this here:

http://globaleconomicanalysis.blogspot.com/2007/10/basket-of-insanity-at...

Mish does a better job here:

http://globaleconomicanalysis.blogspot.com/2007/10/basket-of-insanity-at...