Dollar world currency.

America has replaced gold as a source of liquidity in the economy of the world and become the basis of the world's financial system.

The first reason:

History brings dollars to international currency.
Starting from the Bretton Woods agreement after World War 2 that the effect is still felt today; agreement to use gold as a global standard currency values. At that time the state of the economies of the world, except the United States, were destroyed by the war. This causes them to rely on loans granted by the United States. These loans are given in US dollars. As collateral, Americans receive gold owned these countries. The result, with automatic control of all the gold in the world and thus only the US dollar value is backed by gold. In practical terms, this means that the US dollar has replaced gold as a source of liquidity in the economy of the world and become the basis of the world's financial system. The implication, every country build foreign exchange reserves in US dollars; The dollar reserve currency is needed so that a country can be exchanged for dollars or gold. At this time it was the American currency became an international currency.

The second reason:

The risk of becoming an international currency
Not always become an international currency that has a positive effect on the country's currency has, in this case American countries with dollar. Many of the negative effects that could hit the United States when the currency become an international currency. Some of the negative effects become an international currency, among others:
1. The country must maintain trust me, which led the country to have an arduous task for the world.
2. If the owner of an international currency countries are not able to maintain trust, it can lead to the currency's drop suddenly.
3. It would be difficult to control liquidity

The third reason:

Not all strong currency could become an international currency.
To become an international currency needs a strong owner, in this case a strong state. Being a strong currency does not mean being able to become an international currency. This is because countries with currencies that do not necessarily have the economic and political stability are good. Yet to become an international currency, the country needed economic and political situation is stable, because as an international currency needed confidence of the world for the world to use it.
For example, the currency of the country of Iraq, the Dinar. Although at this time Dinar as one of the strongest currencies, but the situation is not stable Iraq, because of war, conflict in the country, as well as its economy. This causes the world do not want to entrust its currency to the Iraqi Dinar currency because although the strongest, but not necessarily be stable in the long term. Instability can occur because of a war that became increasingly become or conflict in the country, which in turn can lead to the impoverished country and its currency fell to the weakest currency. Whereas the currency exchange and store it is a long-term activity, and so we need great confidence of the world. This is because the US dollar became the currency of the country believed the world because of the conditions that can be predicted to be stable in the long term.
So it's not because of American superpower and simply make its currency international currency or even no-kalikong kong Jewish.
Thank you for reading this article. Written and posted by Bambang Sunarno. sunarnobambang86@gmail.com
author:
http://schema.org/Personal.
https://plus.google.com/105319704331231770941.
name: Bambang Sunarno.
http://www.primadonablog.blogspot.com/2014/11/dollar-world-currency.html
DatePublished: November 22, 2014 at 19:57

Tag : Dollar world currency.

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