Monday, June 7, 2010

Dollar becomes world currency and the large part of the foreign trade made in us dollar.

US dollar come into existence in the world market after the world war 2 .After the second world war most of industrial countries of Europe and Asia suffered a lot .Only the US industries has get the advantage of the huge demands of industrial goods between the second world war and after the second world war .US dollar is not become the world currency due this reason only.
Petroleum was playing the crucial role to get this advantage to the dollar.
USA is the highest energy consumer in the world after the Second World War and the 60% of the total consumption comes from import. It’s the US strategy which convinces the OPEC cartel to sell their petroleum in US dollar. Other countries need to sell their goods or sell their gold to get the dollar on the other hand US don’t need to sell their goods or to sell the gold.
US has to spent a lot to maintain the Army bases in the different part of the world ,spent a large portion of their GDP in the war ,but still the dollar value continue raising in the world there is some reason behind these .Petroleum play the main role and second one that all the OPEC countries are again deposited in the US or invest to purchase the US bonds ,these help a lot to get the US dollar a strong position in the world market.
US dollar close competitor is Euro .Euro comes in the world market after 1990.Euro is provide the new weapon to the European countries to fight against the US dollar supremacy in the world market .
US war against terror and Iraq, Iran and Middle East and Afghanistan war reduce the US influence in the Arabic countries and they are think to change their old pattern to invest in the US security market. It’s true that Euro work as competitor to the US dollar but still the US dollar is only currency used for petroleum trading.
So in near future there is very little chance that Euro get superiority over the US dollar in the Global market.

No comments:

Post a Comment