How the U.S. Dollar Became the World Reserve Currency
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- Опубліковано 19 жов 2024
- How the U.S. Dollar Became the World Reserve Currency
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America also abandoned the gold standard because of a war that was very expensive for the government to fund.
Good thing. Gold standard severely limited monetary policy and government spending. With a modern monetary theory and a strong central bank there is no reason for a gold standard. Dollars get their value from supply and demand the same way gold does, however you can’t control the supply of gold, it just adds an extra layer of complexity having to worry about the value of an arbitrary metal.
@@darksg1295 inflation (or hyper inflation in resource exporting economies) has entered the chat.....
@@saeedhossain6099 Not really. US has had an average inflation rate of 2% since abolishing the gold standard. Before it’s abolishment inflation ranged from 20% to -10%. Why? Commodity backed currencies are harder to control since you can’t control the value of the commodity. Again…modern monetary theory… floating currencies allow the central bank to more effectively stabilize the currency, it’s the exact opposite and all the evidence shows this.
@@darksg1295Nice sugarcoating government stealing money from citizens to fund wars. Imaging calling not having enough money is "limited", no you just don't have enough money. The solution is raising tax, or keep spending low, not printing money.
@@darksg1295finally someone that's studied economics!
Money printer goes brrrr 💸
Love your channel ❤
I like the music in the background 😮
How did leaving the gold standard helped the UK finananced the war?
Wait Wait Wait... I live in New Hampshire... I was never invited to this Bretton Woods conference.
British gold. Huh. More like looted Indian, African gold
So that's why USA was so late to the party in WW2
KWD: Am I a joke to you?
Haha yeah😂❤
Lmao veru funny. KWD is 67th currency in reserve. It's just over inflated
❤❤
Interesting Mythology of World Business Finance, Economy and Global Monopoly Global Landscapes Tertiaries Ocean Areas Empire Red Tape International laws Policies
chi
yet gbp is still worth more. don’t trust this guy.
Someone doesn't understand how economics works (you).
@@ravensfan777 nothing to do with currency
Yet the British pound is was stronger than USD 😂
NO, it is more valuable. By your logic bitcoin is the supreme currency
@@USA_UNITED1776what's the difference being the stronger currency and most valuable? Genuine question
@@MyWillBeDone stronger is less volatile because it is more used and trusted. More valuable simply means it buys more of other currencies, even if it is subject to drastic changes.
666 likes let me change that 😊
To abadon the the Gold Standard was a mistake i think and thectruly beginning of us dollar etc. inflation i believe
Abandoning the Gold Standard was necessary, Gold Standard caused instability for the dollar, before it was abandoned, inflation ranged from 20% to -10%. Since dropping the gold standard inflation has averaged around 2%.
A floating currency gets its value from supply and demand, the same way metals do. The benefit of not having a commodity backed currency is that the central bank can more effectively control the supply and therefor value of the currency without worrying about the price of some arbitrary metal.
There is a reason that no developed economy ever went back to the gold standard.
@@darksg1295doesn't this also make money monopoly money in essence though?
@@MyWillBeDone Can you buy goods with Monopoly money? No, there is no demand for it. Dollars, gold, any currency or commodity, get their value from supply and demand.
@@darksg1295 what I meant by that is it has value simply because we've agreed it's valuable... nothing tangible behind it. I understand there's things that go into it that drive it's value, but realistically it has no worth.
@@MyWillBeDone Gold also only has value because we agree it has value. Platinum is rarer than gold and one of the most useful industrial metals, unlike gold which is mostly useless because of its low melting point. However gold is 3x more expensive than platinum.
The only thing that determines value is supply and demand.
Dollars have high demand and a limited supply, that’s where their values stems from. The dollars demand is so high because of the size and stability of the US financial system and trust in the US government bonds.
Our money is becoming worthless
How?
@@darksg1295Amassing large debt and printing more money, resulting in inflation.
@@pharcyde8083 How exactly does debt fit into that equation? In terms of inflation every country is having issues with inflation right now, US is fairing better than most if not all of them because of the dollars reach. Plus inflation hit a peak of 9% in one quarter. In the 70s we had 15% inflation for a full year. It will return to the normal 1-3% once the economic fallout from the pandemic is over.
@@darksg1295 aren’t a number of countries getting rid of the US dollar as a form of reserve currency?
@@Bob_MN_Sports_Cards A handful of countries are talking about it, there has been little action to actually use local currencies. Ditching USD makes trade less profitable and more risky, it’s also hard to negotiate trade deals with local currencies because of the advantage one side receives. Countries like Saudi Arabia have been talking about ditching the dollar since the 90s. It’s just political hyperbole to scare the US into supporting them. Reality is that the dollar remains 60% of global currency reserves and while countries will probably continue to diversify and chip away at that number, its status as the worlds reserve currency is not going anywhere.