World Economy And The U.S. Dollar
The world economy is not prepared enough for the investor confidence in the dollar would further decrease, and the currency used in international trade and the national reserve will be significantly impaired, according to an AFP analysis.
The dollar will weaken to its lowest level after 1995, if the currency depreciation in relation to the currencies of major economies, continues the trend started in mid-September. The current secretary, Timothy Geithner, is taken, however, increasingly less seriously, given that investors and analysts expected the U.S. central bank will inject several billion dollars into the financial system.
“The dollar could weaken further. Officials of the Federal Reserve will climb a little inflation”, Wall Street Journal headline. The publication strongly criticizes Washington’s policy requires currency appreciation in emerging economies, “flooding”, by contrast, people with their own money.
“Devaluation of the dollar is not a strategy to boost the global economy,” notes Wall Street Journal.
Dollar depreciation may trigger a series of complications outside the U.S. American Coin is a very important element of the international monetary system, under conditions in which 85% of foreign exchange transactions are denominated in dollars. The dollar is also the currency up 62% of foreign exchange reserves of the states.
Abrupt depreciation of the dollar affects the confidence of countless economic and financial players. Such developments increase the price of gold, considered a safe investment to inflation.11