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EC Nebraska | The need for a global currency is to facilitate a global economy. Any two countries trading with each other in their own currencies have to balance their trade, or one of them ends up with a lot more of the other's currency. But with a global currency, trade can exist among multiple countries without anyone having to worry about balancing each bilateral relationship.
Country A needs product from Country B, but Country B doesn't need much from A. Country C does need things from A, and sells things to B and D. A single global currency lets the net balance out, without having to barter between each country.
That didn't start in 1970. The US Dollar was functionally the global currency since taking over from the British pound. We didn't leave the gold standard to become the global currency, we had to leave the gold standard because we already were the global currency.
We've had global currencies since the dawn of global trade. They're part and parcel of a global economy. Without one, global trade is restricted to a barter economy. Very inefficient.
The US dollar had not been mismanaged as a global currency nearly to the extent that you appear to think. No, it wasn't perfect, but it was functioning quite well. Global dollar demand proved that.
We will have to wait to see the results of Trump's attempts to destroy it. | |
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Gold on a tear post. Just a thought.
