Topic > What will happen to the US dollar - 1671

This essay aims to present some of the dilemmas about what could happen with the dollar. This is a topic that comes up especially in business because it is related to risk and impacts operations and profitability in the short and long term. However, factors such as stability, acceptability and anonymity are the main factors why the US dollar was, is and will be the preferred currency globally; however the latest developments in global markets may indicate that the dollar or any other currency cannot be the "currency of choice" forever, especially in a globalized market. Considerations The main requirement for determining whether a monetary currency is acceptable is the implicit trust in it. After numerous market imperfections in recent years, the US dollar demonstrates that, despite being the preferred currency, it presents no problems. For example, $100 bills have a reputation as a favorite target for counterfeiting. As a result, they also tend to have a lot of difficulty being used or traded around the world. A long time ago, when large denomination banknotes were circulating, it was a perfect environment, but this situation has changed because money launderers loved large denomination banknotes. This also represented a huge preference in using the US dollar: anonymity because the US dollar is accepted worldwide and is not necessarily tracked in foreign economies. When companies develop and build operations around the world today, it is common to find that the United States dollar (USD) has become the primary currency of exchange in a country's economy; even in a country where it is not the official currency. While official dollarization may be as well documented as countries like Panama and Peru, the dark world of…half of paper…still doesn't stop US interest rates from rising in a global market. Furthermore, stability is one of the most important factors that explain why a number of countries have adopted the US dollar as their official currency. The US dollar has never been devalued and its notes have never been reversed. For countries with banking collapses, devaluation and inflation, the stability of the US dollar brings with it a certain tranquility. Business is easier to conduct when a stable currency is used. Works Cited http://www.forbes.com/sites/billconerly/2013/10/25/future-of-the-dollar-as-world-reserve-currency/ http ://econlog.econlib.org/archives/ 2013/10/the_relative_un.html http://www.investopedia.com/articles/07/unofficial_dollaration.asphttp://www.nbcnews.com/id/14959939/ns/ business-answer_desk/t/us-dollar-headed -fall/#.Uy2msqhdX0c