How Will Modern Monetary Theory (MMT), Reserve Currency Status And Central Bank Digital Currency Impact You

When a crisis hits a country, capital is withdrawn by foreign investors. As a result, the local currency (Eg: rupees for India) drops in value.

Countries hold reserve currency to pay debts and avoid the balance of payment crisis. The reserve currency can be used in such cases as it is a safe-haven currency.

How Did The U.S. Dollar Become The Reserve Currency The United States has been a lucky beneficiary of the two World Wars. It was geographically far away from the actual destruction happening to various countries in both the World Wars.

In the last few years, there has been more talk about the U.S. dollar losing its status as the reserve currency.

While we may not agree with everything he says, there are nine decades of wisdom buried in Warren Buffett’s quotes.

In 1960, the U.S. represented about 40% of the world economy, but that has shrunk to less than a quarter.

The U.S. sanctions on various countries have made them realize that they need to move away from the U.S. dollar.

The U.S. dollar losing its reserve currency would necessitate another currency to take its place. At this time, no other country’s currency provides stability, convertibility, and wide spread availability as the U.S. dollar.

Having the U.S. Dollar as the world’s reserve currency has significant benefits to both the U.S. government and the U.S. consumer.

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