What is the US dollar backed by?
In: 2582
The Taxation power of the US government. As long as taxes can be levied on what is the strongest economy in the world, the US will have the strongest currency in the world.
Additionally, this status has given the USD even more power, as international trade sees this stability and takes advantage of it, using it as the medium for exchange. Which also strengthens it.
If you want to know the source of this, look into both the Breton Woods agreement and the 1973 Oil Crisis Resolution. These two events cemented the USD as the staple international currency.
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