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Pretty_Lilly's avatar

Is the US Dollar still as good as gold throught out the world ?

Asked by Pretty_Lilly (4655points) May 2nd, 2010

Or have we sank and have been replaced by another top currency ?

I recall years ago;friends of my family that were world travelers told me of how in many countries through out the world {specially 3rd world countries}
The US dollars was revered above their own country’s currency !
e.g Russian,Czech Republic,Thailand,,,etc etc.. street vendors,cab drivers and the like,would rather get paid with US dollars and would have huge smiles as if they were being paid with gold or precious jewels.
*This question is not about the US Gold standard !

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11 Answers

The_Idler's avatar

No.

Not just due to the exposition of the inherent wobbliness of finance-“based” economies, but also due to strengthening and stabilization of local currencies and the success of the euro.

Oh also animosity towards the US for their global agenda and hypocrisy.

In russia, for example, they are beginning to favour euro over dollars, though the local currency (rouble) has become much more stable as well, and some oil producing nations are considering switching to trading oil in Euro, just to spite the USA presumably.

CyanoticWasp's avatar

People in the Third World still love dollars; that hasn’t changed.

I only question your assumption that it ever has been “as good as gold”.

I also laugh at the notion that any nation prefers to avoid trade in dollars “to spite” the USA. No one who does business in a serious way involves himself with such emotional foolishness. The Euro has supplanted the dollar in some markets because it’s perceived as stable, popular, and it may be that Europeans are the preferred market in any case. “Spite” has no place in serious business.

The_Idler's avatar

So, threats were made.

That’s just business that smells like spite.

Obviously, if everyone involved gets wealthy, noone cares who the other party is, but still, threats were made.

CyanoticWasp's avatar

@The_Idler
If I weren’t living and working here, I wouldn’t want dollars myself. They aren’t going to be worth much in a few years, I’m afraid.

Fiat money always fails, eventually, and the dollar certainly will, too. (So will the Euro.) It’s a matter of time and consistently bad economic policy… and wanting to extend credit (or live on it) indefinitely.

“Threats” to switch currencies are not much more than exhortations to implement more sensible national economic policies than our Democratic (or Republican) political leaders seem to be capable of.

cazzie's avatar

There are real reasons to move oil in Euros rather than US dollars. In fact, if Norway joined the EU and/or went on the Euro, the pressure would tip the scale. But, because Norway is on the top of the economic food chain here, it’s not likely to change it’s currency or join the EU.

My husband travels all over the world and has never encountered this mysterious ‘3rd world’ people talk about. There is on place he goes to and has to have US$20’s folded and in pockets to expedite his wait in customs with his equipment. But everywhere else, from West Africa, to Malaysia, to Ecuador, to South Korea, South Africa, Western Australia, Azerbaijan, etc… etc…..he pays in local currency and I have a cupboard full of the left overs to prove it. Any one need any Nigerian currency?

The_Idler's avatar

Yeah, like I said most places have stable currency now.

And the “3rd world” really doesn’t have much meaning, now there isn’t a “2nd world”...
or is that just China?

Tobotron's avatar

I’ve been in and out of Siberia for the last 2yrs and the dollar isn’t really the commodity it was when the Soviet Union collapsed, generally speaking the countries and this goes for the East Block too have changed, everything’s cheaper in their national currency.

Russian’s, East Germany etc used to love dollars because you could actually buy goods with them, then after they loved them because the currency was stable eg lets have the family savings in dollars because the Roubles was suffering from hyper inflation.
But now they’ve switched to the Euro although with recent events in Greece word on the street is Stirling is going to out preform the Euro and Dollar for the next year +

If your looking to invest now I’d look to Gold short and long term, Stirling medium term and future tec esp in Europe long term cause there gonna boom under new legislation etc coming through… :)

RAM1996's avatar

With Congress spending money like drunken sailors, our economy is very much like a house of cards. Any old wind is likely to send the cards tumbling down. I think right now, you are far better off investing in hard goods no matter where you live. Stock up on storable foods, such as canned goods and foods with a long shelf life.

It’s highly possible that the U.S. could experience runaway inflation within the next year or so. If that happens, you’ll have food on hand no matter what the prices at the store are.

mattbrowne's avatar

It has lost some of its appeal, but it’s still among the best currencies in the world.

ItsAHabit's avatar

Street vendors, cabbies, etc. still generally like dollars (and sometimes in preference to their own currencies). It now appears that the Euro is in for big troubles and Germany (the economic powerhouse of the EU) will probably be unable to save not only Greece, but Spain, Portugal, Italy and others. That could spell disaster for the Euro.

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