The Global Power Of The U.s. Dollar

Currency intervention is the action of one or more governments, central banks, or speculators that increases or reduces the value of a particular currency against another currency – this is according to Wikipedia.

Ever since the Bretton Woods agreement in 1944, the U.S dollar became the world’s currency. Bretton Woods agreement was basically an agreement on which every country currency would be back up by the dollar, due to the fact that after WWII United States was the only one with the biggest gold reserve in the world. Although it was proposed as a good idea it had its flaws for one even though it help the U.S and other countries there was simply not enough gold to continue backing up the dollar value. Which lead to President Richard Nixon to abolish the gold standard economy. His abolish of a gold standard economy lead to a new proposal on which the dollar would be back by.

Jack Lew said, "With such a wide reach, America's currency makes a statement about who we are and what we stand for as a nation.”

As the worlds most dominate currency, the USD hold to large advantages of being currency reserved. Each dollar stockpiled and bought in non-US countries is one dollar that the US citizens gave that purchases power against other nations for free. The status of being the main world international trade

The U.S. dollar peaked in value in 2000-2001 and has been in a significant decline ever since. There was a relatively brief period in 2008 when the dollar rebounded quite sharply due to the worldwide financial crisis and economic meltdown, when there was a global rush to the safety of U.S. treasury securities. But since then, the dollar has resumed its long-term downtrend. In the recent years the dollar has been improving relative to other currencies, becausee of the decline in those other currencies.

Strength can be evaluated in many different ways: from economic power, to militaristic prowess, to influence in foreign countries. Today, America seems to be the most powerful nation on Earth when all of these categories are taken into account. The economy of the United States is so strong, that it’s GDP accounts for 22.44% of the gross world product. The U.S. economy is worth 17.41 trillion dollars: trillions of dollars more than the world’s second most powerful economy: China. Outside of the U.S, seven sovereign nations (such as Ecuador, El Salvador, and Zimbabwe) use the U.S. dollar as their official currency (8), demonstrating the

Behind the global power of the U.S. dollar, hides the most significant form of currency you 've probably never heard of, the Petrodollar. The word “Petrodollar” was coined by the Egyptian economist Ibrahim Oweiss, as a way to describe how oil producing and exporting countries were accounting for oil units outside of the regular money supply. While the Petrodollar may not be a commonly used term, I would agree with Economist Jerry Robinson when describing it as, "the most brilliant [series of] political-economic moves in recent history… [being] the fabric that holds our [U.S.] economy together”. As the major cornerstone for the U.S.’S economic prosperity and international hegemony, following the change of the Bretton Woods System to the Petrodollar system in 1971; I 've found the largest independent factor to influence American international interests has been the implementation and preservation of the Petrodollar.

The United States of America’s economy is the most powerful economy in the world, and its currency is often interchangeable with foreign currencies. This economic power is a major part of what makes the United States of America a world power, coinciding with its military might. But with that being said, in recent years, it has also shown to be one of the most unstable economies as well, with the housing crisis of 2008, and the Government Shutdown in 2013. The American Economy is filled with constant corruption, bad practices, and constant threat of total collapse if the status-quo is kept.

The United States is a powerful country with a powerful economy. It has a huge presence in the international market and this is due primarily to its exorbitant privilege. Exorbitant privilege is the benefit that the US is able to enjoy due to the dollar’s status as the currency used for international reserves. Many economists have criticized this privilege of the US, including Barry Eichengreen. Eichengreen presents the argument that the dollar should not be the only currency that is used in the International Monetary System (IMS) and that despite its history, it no longer has a reason to be the only currency in the global economy, believing that the IMS would benefit from having multiple international currencies. He argues this by presenting the history of the economies throughout the world that have led to this point. His presents his argument in his book Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System.

The US dollar is used in the majority of the international transactions and therefore that happens to the American economy, will influence the international financial resources. Dollars bring big consequences both for the USA and for other countries. The economy of many countries depends on currency dollar. The increase in its course reduces the volume of the income in dollars for the country. And change of US dollar more considerably, than change of an exchange rate of the country. On the

In U.S. History “money” was known as paper notes that could never be traded in for a set number of gold and silver pieces. Eventually America ventured away from gold and silver pieces with the adoption of the Bretton Woods system after World War II. The value of the American dollar is now decreasing exponentially. Why is the American dollar devaluation so bad? “The less your currency is worth, the less goods and services you can buy with your money, the less companies make for receiving payment for goods and services, and the less people actually make when they take their paycheck home.” (Hedgeable) If foreign governments decide to stop buying our debt many things will happen to the American dollar. With our interest rates decreasing to 0% there has been no incentive for foreign governments to want to buy our debts. For example, the Chinese have been buying Americans debt for years. they are currently the largest holders of the U.S. debt.

The Euro and its Impact on the U.S. Economy The euro is the official currency of the following 12 European nations: Belgium, Germany, Greece, Spain, France, Luxembourg, Ireland, Italy, The Netherlands, Austria, Portugal, and Finland. Although it has been the official currency since January 1,1999 it became physical tender which can be used by all participating countries on January 1,2002. The introduction of the euro into the world was truly a historic event; it represented a unity never before seen in the history of Europe, a common currency. After years of negotiations and much skepticism from around the globe, the implementation of the euro is no longer an abstract ideal, but a change that nations, corporations, and investors must

The current value that America holds on to the closest is individualism. According to a study conducted by Pew Global, “nearly six-in-ten (58%) Americans believe it is more important for everyone to be free to pursue their life’s goals without interference from the state” (“The American-Western European”, 21). This number is quite high compared to other countries, such as Britain with 38% and Germany with 26%, and attributes to our nation’s ideology. America was founded to be independent and free from a controlling monarchy. The first settlers left Britain due to a lack of freedom to practice their ideals that were not considered “acceptable” and were often persecuted for their religious beliefs. Erik Khzmalyan claims that “the settlers

The Bretton Woods Conference in 1944 spawned two IFIs, the International Monetary Fund (IMF) and the World Bank, in order to rebuild a

Fourthly, creation of the world financial government. Emergence of the world monetary market and the market of the capitals led to modern internationalization of production. The daily turn of these markets makes about 1,3 trillion. US dollars.