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To: Razzz42
Do you know why we are the world's reserve currency?

Because when people do international transaction they prefer to do it in dollars.

They trust the dollar more than other currencies. They would rather hold the dollar than other currencies, and they'd rather receive payment in dollars rather than other currencies.

They can trade in any currency they want to or any combination of currencies they want to. There is nothing stopping them. There's no international law declaring us the reserve currency and saying they have to trade dollars. They choose dollars.

16 posted on 12/02/2011 11:41:56 AM PST by DannyTN
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To: DannyTN

You are so off the mark it isn’t even funny.

Countries can’t buy....say commodities like oil without first converting their currencies to dollars before buying.

There are black markets and other agreements between BRIC countries who try to trade amongst themselves but the reserve currency is the US dollar for the large majority of all trading between countries. There is a reserve currency for a reason, so each floating currency rate (of different countries) can be converted to known dollar values making for a smooth and open transaction on a worldwide basis.


21 posted on 12/02/2011 4:10:38 PM PST by Razzz42
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