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@ The US dollar and the euro are by far the most used
currencies in terms of global reserves, making up
90% of all reserves globally.
@ A À
À ÀÀ  £or 
ÀÀÀ ) is a
currency which is held in significant quantities by
many governments and institutions as part of their
foreign exchange reserves.
@ Ot also tends to be the international pricing currency
for products traded on a global market, such as oil,
gold, etc.
@ This permits the issuing country to purchase
the commodities at a marginally lower rate
than other nations, which must exchange
their currency with each purchase and pay a
transaction cost.
@ Ot also permits the government issuing the
currency to borrow money at a better rate, as
there will always be a larger market for that
currency than others
O |

@ On the 20th Century, the U.S. dollar became the

world's reserve currency because it was the coin of
the world's leading economy. On the "Bizzaro" 21st
Century economy, this causality has reversed.
@ Today, the primary reason the U.S. remains the
world's leading economy is because the dollar still
serves as the reserve currency. However, if market
fundamentals can ever manage to re-assert
themselves, this is a reality that can, and indeed
must, change.
@ On the past, foreign citizens accumulated U.S. dollars so they
could purchase American-made goods. Today, foreign central
banks accumulate dollars so that Americans can purchase
foreign-made goods.

@ On the past, profits from her exports allowed America to become

the world's greatest lender. Today, in order to fund her
gargantuan trade deficit, America has become the world's
greatest borrower.

@ The dollar's reserve currency status allows "rich" Americans to

continuously borrow what "poor" foreigners save, and consume
what foreigners produce.
@ aithout such status, America's consumption would be limited by
its own production, and its borrowing confined by its domestic
savings. On such a world, Americans would have a standard of
living far lower than the one currently enjoyed.

@ The dollar was originally accepted as the world's reserve

currency mainly because America flooded the world with low-
cost, high-quality manufactured goods.

@ On America, the words "it's imported" were synonymous with "it's

expensive." Of a product malfunctioned, a common expression
was "it must have been made in Japan.³
@ On fact, the Japanese had such a hard time
overcoming this stereotype that they actually
name a city in Japan, USA, so they could label
their product "made in USA."
@ Today the exact opposite is true, as imports
are inexpensive, while domestically produced
products are high cost.
@ Japanese manufactures now enjoy the
reputation for quality that American
manufactures lost.
@ |ecent trial balloons launched by various
Asian central banks, concerning diversifying
their foreign exchange reserves; indicate that
the dollar's reserve currency status may
already be at risk.
@ Once that status is lost, the process of
returning to economic viability will be quite
painful, and will involve substantial austerity
from both the US government and its citizens.
O 
@ Over the past several decades, the U.S. dollar has enjoyed its
status as the world's most important and dominant reserve
currency.

@ Every major government and financial institution in the world now

holds significant quantities of U.S. dollars as part of their foreign
exchange reserves. These dollar reserves create a hedge for
them against their own presumably less stable currencies.

@ This dominating reserve currency status also means that every

major commodity²including crude oil, gold, wheat, cattle, orange
juice, coffee, sugar, etc.²is priced and traded only in U.S.
dollars. This helps to create a constant demand for the American
currency as traders must hold U.S. dollars to access
commodities.
@ However, there is evidence that the dollar's role as
the world's dominant reserve currency may be
drawing to an end.

@ And if this is the case, the value of the U.S. dollar

could rapidly decline.

@ On 1965, the United States of America was the

largest creditor nation in the world.Today, it is the
world's largest d
 nation.
r
  

  
 

@ The most widely quoted figure for the debt of the United States is
called the national public debt. This public debt is currently
$10.64 trillion.

@ This is the figured quoted on the famous U.S National Debt Clock
in Manhattan.Ot has increased 385,465% in the past 100 years.

@ The national public debt is all U.S. federal debt that is held by
states, corporations, individuals, and foreign governments. This
debt is money owed by the U.S. government to its creditors,
whether they are nationals or foreigners.
@ The national public debt does not include intra
governmental debt obligations or contractual
requirements of the U.S. government.
@ These obligations include military and civilian
pensions, retiree health benefits, federal insurance
payouts, loan guarantees, and leases.
@ They add another $1.5 trillion in financial obligations
of the United States.
 
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@ The main reason that the US dollar is still the world's

reserve currency is that few understand how
completely the fabric of the American economy has
been rewoven.
@ On fact, the US economy functions in a manner which
would be completely impossible were it subject to
normal market forces.
@ However, by issuing the world's reserve currency, it
has been immune to these forces, and thus its
economy has evolved in a most unnatural way.