Dollars Domination In Global Economy


 A world currency is any money that can freely be used or exchanged for another currency inside or outside the borders of the country that issues it. It may also be called as Global currency. 

The Agreement of Bretton Woods

The United States supplied the Allies with materials and weaponry prior to entering World War II. By the end of the war, the U.S. had the majority of the gold reserves since most nations made their payments in gold. As nations exhausted their stockpiles, a restoration to the gold standard was unachievable.




In 1944, representatives from forty-four Allied nations convened in Bretton Wood, New Hampshire, to devise a framework for managing foreign exchange that would not put any nation at a disadvantage. The group determined that the world's currencies will now be fixed to the US dollar rather than gold.

The Bretton Woods Agreement, as it was referred as, established the power of central banks to uphold fixed exchange rates between different currencies and the US dollar. On demand, the US would then exchange US money for gold. When their currencies grew too strong or too weak in relation to the dollar, countries had some degree of control over their currency prices. They could control the money supply by buying or selling their currency.

 The Petrodollar: What Is It?

A 1945 agreement between the United States and Saudi Arabia led to the adoption of the US dollar as the main form of payment for oil around the world. The relationship between the dollar and oil started as a result of this arrangement, which led to other nations that exported oil accepting the dollar as payment for oil.



Some nations produced so much oil and amassed so much currency that they were unable to spend them all. When a nation that accepts US dollars as payment is unable to use them all, the dollars are effectively taken out of circulation. Petrodollars are the name given to the dollars that these nations were unable to spend.


 

Comments

Post a Comment

Popular posts from this blog

UK Economy digging it's own grave !

Image
UK is experiencing a serious economic crisis for several reasons A crisis related to the expense of living: The British pound depreciates to its lowest level ever about the US dollar. Food costs are rising, and gas and electricity rates are significantly rising as the UK experiences double-digit inflation, which is at a 40-year high. A mini-budget was introduced to solve the energy and economic crisis that has caused record-high gas prices in the UK. The lack of gas storage has caused excessive energy prices, which affect inflation and production.  Power businesses are facing severe financial hardship due to the price cap, which was implemented at 280 pounds per megawatt hour. The UK government raised the energy price cap by 175% to 520 pounds per megawatt hour. Even if energy costs rise for the next two years, the price cap will stay at 520 pounds per megawatt hour. The impoverished sections of the UK population are disproportionately impacted by the rise in comparison to the wealthy.
Read more

Degree is just a Degree !!!

Image
The closest thing to magic is engineering. Many in India would concur that engineering has produced tales of "rags to riches," turning impoverished families into millionaires and timid students into tech titans. Therefore, magic summarizes everything, but the secret to all magic is secrecy: if the world discovers your trick, you will no longer be in demand. Has engineering advanced to that point? Have our contemporary degrees advanced to that point? Tonight, we'll examine this issue, and there's a good reason why most of us concur that Indian Institutes of Technology, or IITs, are among the best universities in the world. The idea is that once you pass the IAT, you're good to go for the rest of your life. The remuneration package may not be waiting for you now that the IITs' recent announcements concern the Bombay campus. 30.6% of students have not yet been assigned. Over 700 of the 2,000 students registered for placement have not yet been placed. This is the
Read more