Why Is The US Dollar A Refuge During The Crisis

The year 2020 will be unstable for the whole world. With the assassination of General Kasim Sleiman by the US military in Iraq, international politics began to be unstable. The world was on high alert because the Iran war threatened the fluctuation of oil prices. Not long after the outbreak of global infectious diseases, even the world’s major economies are facing difficulties.

The outbreak of novel coronavirus has caused one of the greatest health hazards in the modern history of the world. Most countries in the world began to close their borders to control the spread of the virus in their own territory or prevent foreigners from unknowingly spreading the virus.

But the world is not as bleak as it seems. Some European countries began to open up, because the reduction of new covid-19 patients was finally controllable. The two techniques of social distance have also been eased, providing a space for the service industry to breathe and start making money. Although international flights are still limited, tourism is not as viable as it used to be. But people are still living. In the final analysis, this is the most important.

Because the unemployment rate of developing countries like the United States is rising to a record high level, for example, the country with the highest number of covid-19 patients in the world thinks that the money market should also be destructive, but in fact it is not. On the contrary, this is the best time to start investing in some currencies.

although the new novel coronavirus spread rapidly throughout the country and the global economy declined significantly, the US dollar is considered as one of the safest investment assets and has achieved amazing results. At present, more than 1.8 trillion US dollars are in circulation around the world. It even jumped 4% in the dollar index at one time.

But this is not caused by small investors. Most global financial institutions(such as the Federal Bank) have large dollar reserves, and most international transactions are in dollars.

Why is the dollar so reliable?

At the Minneapolis police department, the protest caused by the death of African American man George Floyd was also strangled by the camera at the scene, begging for space to breathe. The United States is considered a politically stable country.

This fact shows that many people who considered peaceful demonstrations soon became violent bandits and riots in many states of the United States, and the police forces clashed with civil society organizations in every corner.

It is worth noting that this belief in the stability of the US dollar stems from the strict practices of the leaders of financial institutions across the country. The dollar has the best liquidity and volatility. Compared with other currencies such as the Türkiye lira or the Argentine peso, the price is not expected to fluctuate significantly. This fact has been recognized not only by the outside world, but also by American politicians. That is to say, before the novel coronavirus pandemic began to shake the world in 2019, US Treasury Secretary Stephen Minusin made a speech showing off the stability and influence of the US dollar. He said: “Many people in the world are using the US dollar as a reserve currency. I am proud of the strong value of the US dollar.”

In particular, the official currency of the United States is mainly used overseas. After the First World War, the gold standard lost trust all over the world, which lasted nearly a century. Many countries like Britain started to lend, but they never did. These loans were obtained from the United States. The same is true of the United States after the Second World War. At that time, a lot of money came from this country to rebuild the whole Europe. President Nixon was highly regarded as the only person responsible for the destruction of the gold standard. On August 15, 1971, he announced that the United States would no longer convert its daughter into gold at a fixed value and completely abandoned the gold standard.

At present, the global circulation is about 1.8 trillion US dollars. More importantly, more than two-thirds of the 100 daughters, Rajpei, and nearly half of the 50 daughters, Rajpei, admit that they only own them outside the United States.

Similarly, the US model plays a role in transparency. China and other large world economies are highly intervened by the government. They were troubled by the disgraceful financial practices that helped the ruling party of the Republic. The European Union and the euro are the second candidate currencies, but they are much more volatile and unlikely to become acceptable currencies. Many countries in the European Union still retain their own currencies. Because sometimes recruitment and conversion will lead to economic problems, external shocks and great changes in the competitive position of the domestic market.