This article was interesting, it spells out the reason the US Dollar has a value. It also points to the fact China and Japan aren't purchasing US Treasuries anymore.
But, the US Dollar has a historic value we can thank FDR for, when he stabilized economies globally to insure the USA has trade partners. He invested in The World Bank (click here) and pushed The Bretton Woods Conference (click here) to form the International Monetary Fund.
The reason the Republicans believe they can play brinkmanship is due to the fact there is no good alternative for the US Dollar in financial trading. It is still 'stable enough' and it has the longest history of stability. The Republicans have gotten to be very arrogant and in doing so, they are foolishly taking the value of the US Dollar for granted.
The global financial markets are seeking strategies to protect from the actions of foolish politicians in the USA. They aren't loyal so much as skeptical anymore, especially since 2011 and the down grade wasn't enough to stop hideous toying with global markets. The Republicans have to stop gaming the system hoping for a political return and the electorate of the USA needs to take the value of their currency seriously. The fact China and Japan no longer purchase US Securities is more of a warning than the US deserves at this point.
17.10.2013
Spencer Kimball
...At the height of its power (click here) in the aftermath of World War II, the United States created a new financial order based on liberal institutions such as the International Monetary Fund and the World Bank. The medium of exchange in that system was the dollar, pegged to gold at $35 an ounce. All other currencies were then pegged to the dollar, establishing the greenback as the world reserve currency.
In the 1960s, French Finance Minister Valery Giscard d'Estaing referred to what he called "the exorbitant privilege" of the US dollar....
...And there are few other options at the moment. The euro remains shaken by its own crisis; the Chinese renminbi has not been fully internationalized; and the Japanese yen continues to lose in value.
"The main thing working in the dollar's favor is the absence of viable alternatives," Eichengreen said. However, if a stand-off in Congress repeats itself in February, and the US stops paying its obligations, investor confidence in the dollar could suffer.
"This event is potentially a big deal because it casts doubt on the stability of the dollar, and it casts doubt on the liquidity of the market - potentially."...
But, the US Dollar has a historic value we can thank FDR for, when he stabilized economies globally to insure the USA has trade partners. He invested in The World Bank (click here) and pushed The Bretton Woods Conference (click here) to form the International Monetary Fund.
The reason the Republicans believe they can play brinkmanship is due to the fact there is no good alternative for the US Dollar in financial trading. It is still 'stable enough' and it has the longest history of stability. The Republicans have gotten to be very arrogant and in doing so, they are foolishly taking the value of the US Dollar for granted.
The global financial markets are seeking strategies to protect from the actions of foolish politicians in the USA. They aren't loyal so much as skeptical anymore, especially since 2011 and the down grade wasn't enough to stop hideous toying with global markets. The Republicans have to stop gaming the system hoping for a political return and the electorate of the USA needs to take the value of their currency seriously. The fact China and Japan no longer purchase US Securities is more of a warning than the US deserves at this point.
17.10.2013
Spencer Kimball
...At the height of its power (click here) in the aftermath of World War II, the United States created a new financial order based on liberal institutions such as the International Monetary Fund and the World Bank. The medium of exchange in that system was the dollar, pegged to gold at $35 an ounce. All other currencies were then pegged to the dollar, establishing the greenback as the world reserve currency.
In the 1960s, French Finance Minister Valery Giscard d'Estaing referred to what he called "the exorbitant privilege" of the US dollar....
...And there are few other options at the moment. The euro remains shaken by its own crisis; the Chinese renminbi has not been fully internationalized; and the Japanese yen continues to lose in value.
"The main thing working in the dollar's favor is the absence of viable alternatives," Eichengreen said. However, if a stand-off in Congress repeats itself in February, and the US stops paying its obligations, investor confidence in the dollar could suffer.
"This event is potentially a big deal because it casts doubt on the stability of the dollar, and it casts doubt on the liquidity of the market - potentially."...
