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The U.S. Dollar: Too Much of a Good Thing?

The U.S. dollar really is everyone’s problem. There are more dollars in circulation worldwide than any other currency – perhaps more than all other currencies combined as a full two-thirds of the rest of the world’s foreign reserves are denominated in the U.S. dollar. It’s also true that two-thirds of all dollars circulate outside of the United States. They have long been the choice of exchange on the world’s black markets. The reason is because they are so recognizable and accepted everywhere e…
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stuff_trader avatar
stuff_trader 2013年05月24日

The problem with such a ‘solution’ is that the problem wouldn’t go away by simply erasing zeros on the currency or introducing a new name for the dollar. The inflation dynamic would still be present if no other action were taken in conjunction with such action.

dynamic_life avatar
dynamic_life 2013年05月24日

This would make interest rates rise, collapse demand for new offerings, and make dollars return to the U.S., thus stoking domestic inflation.

jalil_naftarov avatar
jalil_naftarov 2013年05月24日

The U.S. dollar really is everyone’s problem.

lada_stanley avatar
lada_stanley 2013年05月24日

maybe

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ivan_ohlobistin 2013年05月27日

A failure of the U.S. dollar would mean that, at a minimum, the cost of everything, but especially anything we import, would rise dramatically. In a worst case scenario, the dollar would not be accepted in any quantity for goods or services, either domestic or foreign.

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Shift From U.S. Dollar As World Reserve Currency Underway

Today, more than 60% of all foreign currency reserves in the world are in U.S.[url=http://www.munknee.com/wp-content/uploads/2013/04/dollar.jpg][/url]dollars – but there are big changes on the horizon…Some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade…[and this shift] is going to have massive implications for the U.S. economy. China has the second largest economy on the face of the earth, and the size of the Chinese economy is projected to pass the size of the U.S. economy by 2016 [/and]…
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john_vashenko 2013年05月24日

a much harder time financing its debt. Right now, there is a huge demand for U.S. dollars and for U.S. government debt since countries around the world have to keep huge reserves of U.S. currency lying around for the sake of international trade but what if… the appetite for U.S. dollars and U.S. debt dried up dramatically? That is something to think about.

stuff_trader avatar
stuff_trader 2013年05月24日

Who do you think is Africa’s biggest trading partner? It isn’t the United States. In 2009, China became Africa’s biggest trading partner, and China is now aggressively seeking to expand the use of Chinese currency on that continent.

dynamic_life avatar
dynamic_life 2013年05月24日

a much harder time financing its debt. Right now, there is a huge demand for U.S. dollars and for U.S. government debt since countries around the world have to keep huge reserves of U.S. currency lying around for the sake of international trade but what if… the appetite for U.S. dollars and U.S. debt dried up dramatically? That is something to think about.

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jalil_naftarov 2013年05月24日

A few months ago, the second largest economy on earth (China) and the third largest economy on earth (Japan) struck a deal which will promote the use of their own currencies (rather than the U.S. dollar) when trading with each other.

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lada_stanley 2013年05月24日

the global financial system is centered on the United States but that will not always be the case. The things talked about in this article will not happen overnight, but it is important to note that these changes are picking up steam. Under the right conditions, a shift in momentum can become a landslide or an avalanche.

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