We know that the U.S. dollar is the world’s reserve currency, so it’s only natural that the U.S. dollar goes up and down in value the most. That is why we always have to be on the look-out for the one time when a price dips below that of the previous day’s. We don’t know how we get the value of the dollar. We just know that it fluctuates wildly.
And we are not alone. The Economist magazine recently found that, on average, the value of the U.S. dollar fell by about $8 since the beginning of the year. That is a dramatic amount of decline and shows how the U.S. dollar has a more or less “normal” year-to-year fluctuation.
The dollar is a global currency and as such is not just a U.S. dollar in any country. And any given country has its own specific inflation rate and the USD will always be worth less than it was yesterday. But the more volatile the dollar is, the more important it is to use with caution. Not just because the buck is a global currency, but because the dollar can actually mean different things to different people. Sometimes it’s the real thing, sometimes it’s not.
Our dollar is one of the most sought-after currencies in the world. Its strength and volatility can often make it difficult to use safely. It’s important to remember that the USD is a currency, not a currency, and can fluctuate quite a bit based on what the country is trying to accomplish. The U.S. government, for example, is trying to get inflation in the United States to the point where the dollar starts to take on a more significant role in the process.
Inflation is a good measure of how inflationary an economy is—the more it becomes expensive to buy, the more expensive it is to pay for things—because it means that what the government is attempting to do is more important. The higher the inflation rate, the more important it is to the government’s agenda. If the USD is more expensive to buy then the government is trying to buy more of something, then that means they have less money to spend on other things.
A low US dollar makes it more expensive to buy things. When the United States government spends more money to buy cheaper things, then the government has less money to spend on other things. That means the government is more important to us.
That’s it for now. Lots more coming soon.
Well, I am no longer an employee of the United States Government. I am now an Independent Consultant.
In the words of the late Senator William Proxmire, “We all have to start somewhere.
Well, I am not an employee! I’m just an independent consultant.