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.
That’s actually sort of what they do. Every government maintains a supply of dollars that they use for international transactions and nearly all international transactions are conducted in dollars – including when they don’t involve the US.
The only international transactions that don’t involve dollars are transactions involving countries under US sanctions, IE – Iran, Venezuela, Cuba, and North Korea.
Venezuela and Iran tend to make deals using gold or oil.
Cuba can repair old Soviet weapons systems and so occasionally trades that as a service. It can also trade agricultural products. There was also a period during the 2000’s and early 2010s when it was trading with oil that Venezuela gave it, but Venezuela isn’t in an economic position to just give Cuba free oil anymore.
North Korea trades in domestically produced copies of Soviet weapons, ballistic missile technology, nuclear technology, military training, and occasionally black market dollars that China lets North Korea launder through its banking system.
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