THE IMPORTANCE OF THE DOLLAR
The dollar, which is one of the most widely used currencies in the world, has a usage of about 60% in international trade and is therefore one of the most powerful currencies in the world today. Naturally, this makes America one of the largest economies in the world.
The course of many currencies in the world is determined by the dollar and many assets, such as gold and oil, are traded on the dollar.
So, what is this dollar, Why is it so important in the world market?
The main reason why the dollar has so much say in World Trade is the Bretton Woods monetary system that was signed in 1944.
II. 44 allied countries, led by the US after World War II, have decided to index only the US dollar and other currencies to the dollar over Gold. This decision was the beginning of the process of taking the world under the hegemony of the dollar. Because only the U.S. dollar could be converted to gold, and other countries could easily keep their money in the dollar by the easy index of the dollar.
According to the agreement, the United States will only be able to print as much gold as it has. But America did not comply with this Agreement and started to export money to the world by pressing extra money to close its current account deficit. And as the economic and political power of the United States increased in the years following, the dollar became a reliable port for other countries. Thus, the US dollar corresponds to the gross national product (GNP) of all countries that accept it. Today, the exchange value of 7 trillion dollars is balanced with only $ 4 trillion of gold.