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Why is the US dollar so powerful ?!

 

why is US dollar so powerful , How US dollar become powerful and United states dollar gain importance, The story of United states dollar.The United States dollar was printed in 1914 upon the creation of Federal reserve bank. Due to world war I, many countries growth stopped but not America, because no big war took place on the lands of America. This put America one step ahead ... Today US dollar is so powerful because of many reasons... some of them are Strong Economy, High ratio of entrepreneur, Gold reserve.

The United States dollar was printed in 1914 upon the creation of Federal reserve bank. Due to world war I, many countries growth stopped but not America, because no big war took place on the lands of America. This put America one step ahead ...                                                                                                           Today US dollar is so powerful because of many reasons... some of them are Strong Economy,  High ratio of entrepreneur, Gold reserve.  

              Other countries trade with US dollar therefore dollars are the major cashflow. This strength makes US to structure monetary policy without any dependence on exchange rate fluctuation which is major advantage of US dollar. This is the basic reason for the interest of Foreign countries towards the US dollar.Since domestic purchasing power of dollar is high , US can concern Dollar dominated claim without an exchange .Now what is the main reason for US dollar to become superior…So, when the world war I and II took place ,many countries abondand Gold standards so that they can buy their military expanses with paper money . Which devalued the currencies.The US become the lender of choice for many countries.US started supplying of weapons , supplies and other goods and taking payments in Gold. 

               At the end of the war US become the majority holder of gold in the worldDuring World War II, the U.S. supplied the Allies and got paid in gold propelling the U.S. to the largest holder of gold.  After the war, countries linked their currencies to the dollar, which was linked to gold. The gold standard ended, but the dollar’s reserve status remained.                    

Today, more than 61% of all foreign bank reserves are denominated in U.S. dollars, and nearly 40% of the world’s debt is in dollars.                                                                                                    

Around 80% of worlds trades takes place in dollar , Also most foreign countries in the world accept payments in dollar.



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