In 1971, the US decided to unhook the dollar from the goldstandard unilaterally in order to rewrite the rules of world business in America’s advantage.
At the time the US Treasury Secretary John Connally said “It may be ourcurrency but it’s your problem” a very famous phrase in which we are going to see how the US uses this currency on their favor and also the wrong side and perverseeffects of such a powerful currency.
The US dollar is the currency of a large number of countries (Ecuador, Marshall Islands, Virgin Islands, Salvador …) withoutforgetting that many of others currencies are directly linked to the rate exchange of the green bill. That’s why it’s the first leading money used for the transaction butsince 2006 the second in term of circulation.
The principal characteristics of the dollar are the following:
- It’s the main reserve money used all over the world.
-It’s the main money used in international commerce.
- It’s the main currency on the exchange market (82% in 2008, 39% for €).
- It’s the main money on the mostimportant financial markets.
According to the IMF, in 2002 the dollar represented 72% of reserve money in central banks all over the world but fall down at 64% by theend of 2007.
And to finish with those precision we just have to add that half of the dollar bills are owned out of the United State of America.
Here is a graphicpresenting the variation of the dollar exchange against Euro.
We can analyse several turning in 2001 the dollar collapsed because of the World Trade Center attack