What Will Happen to the U.S. Dollar Essay
The principal requirement to determine if a Currency Money is acceptable is the implicit trust in it. After many market …show more content…
To have a better understanding of these processes, the next graphic will illustrate how dollarization affects direct or indirect way the international economy and the countries involved around the world.
The exchange Market
While many people associate dollarization with the U.S. dollar, the association is not exclusive. The euro, British pound, Russian ruble, New Zealand dollar and Australian dollar are also accepted outside their countries; although in a localized nature. For example, the Russian ruble is accepted in a number of countries from the old Soviet Union; but other aspect that create discussions is the fact of how China may have prompted some interest in the subject: “. . . it is perhaps a good time for the befuddled world to start considering building a de-Americanized world,” wrote Liu Chang for China’s official news agency Xinhua.
With the U.S. recent crisis, and the 2011 credit rating downgrade, United States finances does not look very good for many. However to explain the meaning of the reserve currency status, why it will continue to a large extent, and how the related issues influence the future, it is necessary to understand that countries buy United States Treasury debt not just as an investment,