Shares/Stock Why US dollars remain strong amidst economy imbalance

[Jasz]

Americans are often told that the US dollar is strong because it's the world's reserve currency. But this isn't true. The reason the US dollar remains strong despite the economy being imbalanced is because of its size and power in international banking. The Fed does indeed control the monetary supply, but not all of it.

There are many major central banks in other countries that do have a say on how much money is printed, and they have been increasing their purchases of U.S. debt as well as buying up stocks and bonds since 2008. We call them "exchange rate regimes." They don't follow US policy so much as they mimic it by buying lots of dollars with their own currency, which makes them stronger and us weaker.

Theoretically, these countries could dump our debt if they wanted to make a point about the Fed's policies—which is why we're basically printing money for free right now—but nobody wants to do that because it would hurt their own economies too much.

 

[Sotherefore]

If you are not within the United States you may not understand the economic imbalance they are going through because the price of commodities will increase during economics crises. And beside a lot of people consider the u.s. dollars to be among one of the strongest currency in the world , maybe because of this it will be very difficult for you to see a serious devaluation in this currency.

This is what I wondered too sometimes why the US dollars will always be strong even when there is an economic imbalance . Probably maybe there are a lot of other complicated reasons we may not understand , an economist or an accountant will have an idea.

Another possible reasons why this may be so is because the United States dollars is the official currencies that are being used mostly anywhere around the world for buying of goods and services and for international transaction . This could be another reason.