It doesn’t really make sense for countries or unions (e.g. EU) to decide to base their trade of the USD and keep a lot of their foreign reserves as the USD if it isn’t backed by gold. Wouldn’t this just mean that a lot political power is given to the US because they have the ability to arbitrarily set the value of trading currency if it isn’t based of a real-world resource like gold ?
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>Wouldn’t this just mean that a lot political power is given to the US because they have the ability to arbitrarily set the value of trading currency if it isn’t based of a real-world resource like gold ?
It’s the other way around. The US dollar is used for global trade because the US already has a lot of political power, and people don’t believe it’s going to lose it all too quickly any time soon.
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