So for example, let’s say the British Government wanted to buy something from the US government. Well the U.K. wouldn’t exactly hoard a shed load of dollar bills “just in case” they fancied making a purchase from the US. By the same token, the US wouldn’t accept a she’s load of pound notes because they’d be useless to them (surely)
So what valuable asset do countries usually trade in?
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> Well the U.K. wouldn’t exactly hoard a shed load of dollar bills “just in case” they fancied making a purchase from the US
Except that’s exactly what the U.K. does. Multiple shed loads. A single shed can, at best, load a few million dollars. Also, they use bunkers as treasuries, more safe than sheds.
Every country has a stash of currency for the countries they trade with. And in lieu of the correct currency, they’ll use dollars or euro’s. That’s what they call a “reserve currency”, currency you hold in reserve for international trade.
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