The dollar is a freely convertible currency (FCC). This means that dollars can be exchanged anywhere in the world. The value of the dollar in the modern world economy can hardly be overestimated.
History of the dollar
The United States of America had its own currency back in 1786. The first dollars were gold and were printed not by the state treasury, but by independent banks.
Contrary to popular belief, not all dollar bills feature American presidents. Thus, one of the "fathers of the Constitution" and the first US Secretary of the Treasury, Alexander Hamilton, is “present” on the $ 10 bill. Benjamin Franklin, depicted on the one hundred dollar bill, is a great scientist and public figure.
Crisis of the 70s
During the Second World War, US dollars began to play the role of the world currency. The USA is less than the European states and the USSR suffered from the scourge of the war, so the USA temporarily assumed the role of the "guarantor" of the world economy. The United States provided assistance to many affected states in the form of loans (lend-lease), which the destroyed countries had to return in dollars and gold. So the States received large gold reserves, which became the collateral for new notes.
The role of America in the economy and the large issues of banknotes not backed by gold began to seriously concern the governments of developed European countries. The climax was the visit of Charles de Gaulle to the United States with the aim of exchanging 1.5 billion US dollars for gold.
During the 1976 agreement in Kingston, Jamaica, the US dollar became the world's reserve currency. The obligatory exchange for gold, which had become impossible, was abolished.
SLE
A freely convertible currency is not only subject to exchange for the state currency without restrictions. In addition, the export of currency from any state should not be limited by the authorities. There are currently 17 hard currency currencies, including the euro, pound sterling and yen. Other hard currency currencies are tied to the dollar exchange rate. Most of the financial transactions between companies from different countries are carried out in US currency. The dollar is not georeferenced - the euro is tied to the EU, and the yen is tied to the Asian zone of influence.
Dollar and money supply
The dollar dominates the world money supply. This means that over 61 percent of all goods are priced in US dollars. "The language of the dollar" is understood in hundreds of countries around the world. It is on the dollar that foreign tourists can rely in difficult situations.
At the same time, the US national debt is growing and growing. It currently stands at over $ 17 trillion. Dollars are in high demand in the world market, and the United States is printing more and more money, not backed by goods and gold. Such an irresponsible policy can lead to their complete devaluation.
