In the hype raised by the media about a possible devaluation of the dollar, no one noticed a caveat. There it is not to ban the circulation of U.S. dollars on world markets and, moreover, is not about curtailing industrial production in the U.S., but only about the fall of the dollar. Large or small, sudden or slow, but only about the change in the exchange rate of the American currency.
Of course, the Central banks of different countries can set their – official – the US dollar. But the introduction of a flexible (floating) or fixed exchange rate is influenced by many reasons, including the desire of governments to balance the balance of payments of the country or the desire of the ruling cliques to stay in power longer.
Do not forget that Americans living in the United States, are not rubles or euros, only dollars. And they absolutely don’t care what the rate of their currency will be somewhere in Venezuela, Russia or Syria (about U.S. relations with China – a separate conversation).
Despite the fact that in almost all countries of the world blamed the dollar, everywhere accept in payment for their natural resources, agricultural products, and if you have plants and factories, and for industrial products.
Moreover, in order to neutralize the weaknesses inherent in the economies of developing countries, their governments and Central banks not only agreed to receive payment in U.S. dollars, but acquire them the US debt. This is perhaps the most paradoxical phenomenon of the modern world. But it has a fairly simple explanation.
For anybody not a secret that many governments, in order to avoid popular unrest and to stay in power, periodically turn on the printing press. Initially the workers are happy with the increase in wages. But soon this leads to higher prices and lower standard of living of the masses. And the pattern repeats again.
Power again to make the issue of cash (in Russia, in huge sizes and even non-cash) and the situation is repeated once again. More money becomes available, they depreciate and prices are rising. As a result, to save their savings from devaluation, many people would like to buy the currency.
What happens in these countries with foreign currency ? First, it is usually directed to gold and foreign exchange reserves of the country. Secondly, the question arises in what form it is there to keep in dollars, euros, other currencies, securities other countries or in gold (usually in the form of ingots and coins). Thirdly, we have to decide on how to proceed with these gold reserves, i.e. how to increase or spend it.
If the foreign exchange revenues of the country will be just lying in a state the pod, they will not increase, and may even be stolen. After all, there comes in the factor of corruption of the authorities (officials and bankers). Or representatives of the establishment and the ruling clans will be to buy foreign exchange earnings of the country on stolen from the budgets of all levels billions.
Therefore, in order to somehow maintain and even slightly increase the foreign exchange reserves of the authorities in many countries go to the primitiveness of the simple – they buy U.S. debt. And everyone knows that the US has a big problem with the growth of external debt.
Nevertheless, given its foreign exchange earnings in the USA. But give knowing that in their home country currency to maintain it will be even harder – it will “eat” monetary inflation or its stolen, or simply taken away as the result of any revolution or military coup.
In fact, the US has long turned into a “currency Switzerland”, which receives foreign currency (dollar) incomes of almost all countries of the world. And very few people realize that the US is unable to pay all its obligations. However, everyone thinks that it will not touch it, he will have time to return your currency stash.
However since it was intended from the beginning. Therefore, according to the old obligations of the United States respond to the issue of new obligations. Many governments and banks do. In the USA only “issue” of debt put on stream.
By the way, the US government is very uncomplicated to produce “security” of its debt obligations. If necessary, they just produce the emission of dollars in cash. Let me stress that these dollars are absolutely not to provide us with goods and services. But here “the card is in the suit,” because a significant mass of newly printed dollars are exported outside of the United States, for example, in Russia.
And here again we can recall something with which the author began your material. US dollars successfully taking in Nigeria and Iraq, and Russia. Not by chance they say that “the Dollar – it and in Africa dollar.”
In fact, a large part of their financial problems, the United States gradually shifted to other countries. And he did it all for them, so to forget that everyone can be very difficult.
Here we come to another serious issue – how to deal with the American currency at all. It is already so much printed that in many countries she goes on a par with the national currencies.
But the most important thing here – the USD was a lot, a lot. From this the us currency is becoming more accessible not only privileged, but also to the wider population.