Because the dollar is used as the exchange currency, and especially for trade in oil, pretty much every nation has to hold dollars for trade.
To keep up with world dollar reserve demand we (The Fed) keep issuing dollars. Over time the dollars has lost value (purchasing power). Other nations still have to maintain a reserve dollars that now purchase less; They have to spend more of their currency the same dollar purchasing power. The result is a kind of an “tax” that the US levies against the rest of the world for using the constantly devaluing dollar.
Other nations resent this “tax” and are trying to develop alternatives to using the dollar for exchange, notably Russian and China.
There are negative consequences that others can perhaps explain (At this late hour!) If you don’t use Dollars for trade they you don’t need to hold US Treasury securities. In effect, it makes it easier to dump US Debt and destabilize the US economy.
“””Because the dollar is used as the exchange currency, and especially for trade in oil, pretty much every nation has to hold dollars for trade.”””
Address the prior questions, and let me add some more:
Are the banker’s hands soft and clean? Can you eat paper, or digits?
What of the workman?
Who is the Master?
;)
OP:
http://freerepublic.com/focus/chat/3714603/posts?page=1656#1656