Fall of the Dollar:part-1

The primacy of US Dollar as global Means of Exchange as well as World Reserve Currency is in tatters, due to various geo-political and economic reasons. From the early 20th century, United States has enjoyed unprecedented economic and political clouts of global scale. This enabled Uncle Sam to exercise supreme control everywhere in the world. This also enabled the country to alter the traditionally established means of exchange and reserve currency, i.e-Gold Standard. For meeting its ever expanding fiscal deficit, it was forced to break the system of balancing its money with reserve (i.e. gold). So it was virtually free to expand its monetary base, without having to keep any corresponding reserve. By selling its own-currency-denominated debts like US Treasury Bills and Bonds, it has borrowed virtually indefinitely. Foreign countries, mostly the central banks, have hold mega amounts of US dollar reserves on their accounts, which in turn, don’t carry much value other than promise to pay. Dollar has also been established as means of exchange to trade oil, which is the “global fuel” for energy, for no real economic reasons. The costly wars that the US has been engaged with, starting from Vietnam War to recent Iraq & Afghanistan War, have caused gigantic pressure on its fiscal balance for long. The most powerful country on Earth, apart from its fiscal imbalance, is also entangled with its own economic crisis like real estate collapse and financial sector collapse. The seemingly indispensable Quantitative Easing policies will continue to shatter the US currency further. Time will say where it is heading to.