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  • Essay / What will happen to the American dollar - 1671

    This essay wishes to present some of the dilemmas of what could happen with the dollar. It is a topic that comes up particularly in the business world because it is linked to risk and affects operations and profitability in the short and long term. However, factors such as stability, acceptability and anonymity are the main factors why the US dollar was, is and will be the currency of choice in the world; However, the latest developments in global markets may indicate that the dollar or any other currency cannot be a “currency of choice” forever, especially in a globalized market. Considerations The main requirement for determining whether a currency is acceptable is implicit trust in it. After numerous market imperfections over the past few years, the US dollar is showing that although it is the preferred currency, it is not immune to problems. For example, $100 bills have a reputation for being a prime target for counterfeiting. As a result, they also tend to face many difficulties in being used or marketed worldwide. Long ago, when high-value notes were circulating, this was an ideal setting, but that situation changed because money launderers liked big notes. This also represented a strong preference for using the US dollar: anonymity because the US dollar is accepted worldwide and is not necessarily tracked in foreign economies. Today, when companies develop and conduct business around the world, it is common to find that the United States dollar (USD) has become the main currency in a country's economy; even in a country where it is not the official currency. Although official dollarization may be well documented as in countries like Panama and Peru, the murky world of...... middle of paper ...... nevertheless does not prevent rates of American interest to increase in a global market. .Furthermore, stability is one of the most important factors why a number of countries have adopted the US dollar as their official currency. The US dollar has never been devalued and its notes have never been reversed. For countries facing bank collapses, devaluation and inflation, the stability of the US dollar provides some peace of mind. It is easier to do business when a stable currency is used. http://econlog.econlib.org/archives/2013/10/the_relative_un.html http://www.investopedia.com/articles/07/unofficial_dollarization.asp http://www.nbcnews.com/id/14959939/ns /business-answer_desk/t/us-dollar-headed-fall/#.Uy2msqhdX0c