Eli5: Why is the U.S. Dollar so powerful?
In: 208
So in school, there are three cliques: the jocks, the nerds, and the normies. However, every one in school follows the same trends, memes, etc. It just so happens that the normies produce the sickest content including these sweet cards that have faces of the most popular normies on them. If you have one of these cards, you know that you have something that other people would want. Therefore, you know that if you see that someone else has something you want, you can trade them one or more of these normies’ cards for it.
In essence, the normies’ cards are the dollar on the smallest and most trivial scale. The dollar’s value has remained stable for so long with institutional capital behind it (government recognition of its value) that it is nearly a guaranteed to be a holder of value into the future. In folk economics, you want to be confident that a unit of currency in your wallet today will be able to buy the same amount of good in your wallet tomorrow. It is a near guarantee (at least in the long-run past) that your dollar will largely be able to purchase the same amount of good in a years worth of tomorrows, relative to say the Russian Ruble. That’s why a lot of global corporations and businesses will operate in the dollar: there’s a lower likelihood that you will lose value simply due to the whims of the currency market (which is technically just a very x100 complex popularity contest).
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