This essay wants to present some of the dilemmas of what could possible happen with the dollar. This is a topic that comes up especially in the business arena because it is related with risk and affects the operations and profitability in the short and in the long run. However factors such us stability, acceptability and anonymity are the principal factors why the U.S. dollar was, is, and will be the world's currency of choice; however the last developments in the global markets could indicate that the dollar or any other currency cannot be "currency of choice" forever specially in a globalized Market.
Considerations
The principal requirement to determine if a Currency Money is acceptable is the implicit trust in it. After many market imperfections during the recent years, the U.S. dollar shows that even though it is the preferred currency it is not aside of problems. For example, $100 dollar bills have a reputation of being a preferred target for counterfeiting. As a result, they also tend to have a lot of difficulties to be used or traded around the world. Long time ago when high denomination bills circulated it was a perfect setting, but this situation changed because money launderers loved large bills. This also represented a huge preference to use the U.S. dollar: anonymity because the U.S. dollar is accepted around the world and it is not necessarily tracked in foreign economies.
When companies develop and realize businesses around the world today, it Is common to find that the U.S. dollar (USD), has become the main exchange currency in a country's economy; even in a country where it is not the official currency. While official dollarization may be well-documented like countries such as Panama and Peru, the murky world of...
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...ot, nonetheless, prevent U.S. interest rates from going up in a global market.
In addition, stability is one of the most important factors that explain why a number of countries have implemented the U.S. dollar as official currency.
The U.S. dollar has never been devalued, and its notes have never been overthrow. For countries with common bank collapses, devaluation and inflation, the stability of the U.S. dollar conveys with it a confident amount of peace of mind. Business is easier to perform when a stable currency is used.
Works Cited
http://www.forbes.com/sites/billconerly/2013/10/25/future-of-the-dollar-as-world-reserve-currency/ http://econlog.econlib.org/archives/2013/10/the_relative_un.html http://www.investopedia.com/articles/07/unofficial_dollarization.asp
http://www.nbcnews.com/id/14959939/ns/business-answer_desk/t/us-dollar-headed-fall/#.Uy2msqhdX0c
As the new century approached, a national crisis began to develop in the United States. The nation faced a severe depression, nationwide labor unrest and violence, and the government’s inability to fix any of the occurring problems. The Panic of 1893 ravaged the nation and became the worse economic crisis of its time. The depression’s ruthlessness contributed to social unrest and weakened the monetary system’s strength, leading to a debate over what would be the foundation of the national currency. As the era ended, the US sought to increase its power and strength.
Throughout history, the United States have clung to their founding values, such as freedom and equality, with brute force. Today, with these values still just as prevalent as they were back then it is decidedly so that the legacy Andrew Jackson left behind is not the best fit to be represented on our currency. A man who was too headstrong and selfish and wrongfully followed his own personal agenda doing whatever he pleased, including mass murder, and does not even support the idea of paper money is hardly the person qualified to personify our great country and its legal tender.
Strong is good. Weak is bad. These generalizations sound simple enough, but they can be very confusing when come to money. Is a "strong" U.S. dollar always good? Is a "weak" dollar always bad? Understanding of it is a necessary in marketplace. The term such as “Strong” and “weak” dollar is a “hot topic” which always bandied about by economist on a daily basis and also public. This issue is so important to almost every one. It seems like part and parcel of people who very concern about currency likes investors, economist, foreigners who study or working in the United State and so on.
There is perhaps no other political issue in our contemporary society that is more pertinent, pervasive, and encompassing than a nation’s economy. From the first coins used in Greece and the Asia Minor in the 7th century BCE, to the earliest uses of paper money, history has proven time and time again that the control of a region’s economy is absolutely crucial to maintaining social stability and prosperity. Yet, for over a century scholars have continued to speculate why the United States, one of the world’s strongest and most influential countries, has one of the most unstable economies. Although the causes of this economic instability can be attributed to multiple factors, nearly all economists agree that they have a common ancestor: the Federal Reserve Bank – the official central bank of the United States. Throughout the course of this paper, I will attempt to determine whether or not there is a causal relationship between the Federal Reserve Bank’s monetary policies and the decline of the U.S. economy. I will do this through a brief analysis of the history and role of this institution, in addition to the central banking system in general. In turn, I will argue that the reckless and intentional manipulation of the economy by the Federal Reserve Bank, through inflation and the abolishment of the gold standard, has led to the current economic crisis in the United States.
The coins made in gold, silver and bronze were traded during Roman Empire and the shortage of coins created a barrier for money circulation. However with the establishment of paper money, a sophisticated banking, global clearing system and electronic money, the global financial system evolved with a worldwide framework of legal agreements. In the Global Financial market, foreign currencies issued by the world, countries are traded by the buyers and sellers using currency exchange rates. Now a day, it is very common practices of companies in one country to raise capital in a foreign country by listing their stocks on major foreign exchanges given the growth of equity markets are becoming more globalized (SNHU, 2015).
The value of the US dollar relevant to other currencies is a major consideration for the Federal Reserve. If they prevent large changes in the value of the dollar, firms and individuals can comfortably plan ahead to purchase or sell goods abroad.
stability and uphold the value of the dollar. The Fed is able to make the necessary
On the other hand, there is the element of widespread profit from the market of the electronic currency. The ones who [participate...
Money has evolved with the times and is a reflection of the progress of man. Early money was itself a physical commodity, grain, gold or silver. During the vital stage, more symbolic forms of money such as certificates of deposit, bank notes, checks, letters of credit, bonds and other forms of negotiable securities came into prominence. Social development transformed money in to a trust, “In God We Trust' it says on the back of the ten-dollar bill.” (The Ascent of Money, 27) Today money is faith in the person paying us and belief in the person issuing the money he uses or the institution that honors his money. This trust has no end it can be extended to a greater number of individuals.
Walker, Bruce. "Euro Likely to Keep Losing Value." The New American. The New American Magazine, 7 July 2010. Web. 23 May 2011. .
Paper money is more complex. From 1900 through 1971 (with the exception of during World War I), the US dollar was backed by gold, meaning its value was legally defined by a certain weight of the metal. That ended in 1971, when Richard Nixon shocked the world by breaking the link to gold and allowing the dollar’s value to be determined by trading in the foreign exchange markets. The dollar is valuable not because it’s as good as gold, but because you can buy goods and services produced in the United States with it—and, crucially, it’s the only form the US government will accept for tax payments. Among the Federal Reserve’s many functions is allowing the issuance of just the right quantity of dollars—enough to keep the wheels of commerce well greased without slipping into a hyperinflationary crisis.
The invention of money is perhaps one of the greatest achievements of human civilization. From the very beginning of society, people have used money to circumvent the difficulties of bartering and to foster trade and commerce. Since then, money has come a long way. No longer do we need to rely on silver coins, cocoa beans, or even anything of intrinsic value to conduct our business; today, we use paper currency, which is convenient and easy to carry around. But slowly, we are moving into the digital age of money, an age in which less of our money is actually tangible and more of it is just data on a computer server. To some, this prospect may seem daunting. However, given the major advantages of electronic money over outmoded paper counterpart, society as a whole should embrace the upcoming era of digital money.
...global organizations, demographics and communities are responsible for the large success of the many crypto-currencies on the digital market today. From my discovery of crypto-currencies in late 2013, I have discovered a major trade community with the international population. The crypto-currencies are growing largely in size and popularity. I am concerned over the stability of crypto-currencies - many of types currencies have suffered major capital loss, decrease of market cap, theft, illegal trade etc.. These certain currencies could be a hazardous to deal with in the future. I believe trade and transaction of crypto-currencies should be encouraged on a local, national and global level. Although they have suffered major setbacks in the global economy, I maintain that crypto-currencies have a positive future and that they will undoubtedly affect the worlds economy.
Today, couple of monetary forms are completely upheld by gold or silver. Subsequent to most world monetary standards are fiat cash, the cash supply could increment quickly for political reasons, bringing about inflation. The
The foreign exchange market is one of important mechanism in the international business because foreign exchange is an intermediary for all nations in term of the growth of the economy. There are many functions of foreign exchange market in the global economy. In the international business, it uses the foreign exchange markets in four ways. First, the pay...