Tue 2 Jun 2009
Al asked:
I’m hearing no countries want to trade in dollars, including china and other countries are demanding other currencies outside of the euro also….. Do you think the implications of this will be the collapse of our country and economy ?
I’m hearing no countries want to trade in dollars, including china and other countries are demanding other currencies outside of the euro also….. Do you think the implications of this will be the collapse of our country and economy ?
There is NO LAW that says people are forced to trade goods and services in US Dollars. The reason everybody does trade in dollars is because the United States has the largest and most stable economy on the planet. Thus nations to store reserves in dollars, trade commodities in dollars, etc don’t have to worry about radical leaders ruining the economy, defaulting on debt, or losing a war should somebody attack. Not to mention low inflation and a sound monetary, financial, and political system.
There is no other nation who mets those marks. Europe is close with the Euro, but with its 15 member nations who all share power, economic issues can shift in the blink of an eye. What might be good for Germany might be bad for France. And depending on who’s in power, might be bad for your country if your reserves are in Euros.
Japan is still stuck in a deflation from the 90s and China is a communist country with a currency that isn’t floated. Russia is getting rich on oil, but they are still a poor country. Beyond that, there is nobody the world banks would trust to preserve wealth.