The demise of the dollar

Money has been used throughout history for trade.  But in today’s world, only a few global currencies are used by nations for settling payments for their trade. The most popular global currencies are the US dollar, the euro and the yen. 

Of these, the US dollar is the most popular. It makes up 64 percent of all known central bank foreign exchange reserves.

That makes it the de facto global currency, even though it doesn't hold an official global title. The reason for the dollar being the most powerful currency attributes to the Two World Wars that took place.

After the Two World wars the whole of Europe was badly hit whereas the US still remained unaffected. The US Dollars were lend to countries of Europe by the US for their rebuilding and thus emerged as a powerful currency in Europe. The Dollar became more popular in Europe and banks in Europe started Exchanging Dollars and this gave Dollar versatility and strength.

In fact, it was some 70 years ago after World War Two when the US Dollar became the international standard. That took place at the United Nations Monetary and Financial Conference at the Mt. Washington Hotel in New Hampshire, famously know as the Breton Woods Conference

The US dollar is strong for a number of reasons. Western analysts may say the most important reason is a relatively strong US economy.

They may also say the US economy has been outperforming most international economies in recent years—especially the developed economies that are the biggest trading partners for Europe and Japan. A relatively good economy has helped boost US financial markets and made the US a more attractive destination for foreign capital.

But there have also been certain political moves on the part of the United States in the past that have given the dollar the strength that it has today. But those moves that many find as a result of an unfair diplomatic move by Washington, is less spoken about in mainstream media.

Oil, Saudi Arabia, petrodollar, printing greenback, gold reserves, the Nixon shock and secret deals: just some key words describing the dubious moves by the US when it comes to the dollar.

Many believe that the supremacy of the US dollar has given America a powerful tool to bully other nations. Examples of this include Iran and Russia, and even China to some extent.

China has already made its move away from the dollar. For example, one move that China has made is enter into a very large currency swap agreement with the eurozone that is considered a huge step toward establishing the Yuan as a major world currency.  This agreement will result in less US dollars being used in trade between China and Europe.

Press TV’s website can also be accessed at the following alternate addresses:

www.presstv.co.uk