What is the importance of Dollars or US Dollars in our economy?

Answer 1

Right now the importance of the dollar is to get Americans to spend it so their coming out with a dollar coin to see if that will encourage spending. More Americans are holding on to their money and when that happens it does the economy no good!

Answer 2

If you trade in US dollars.. guess what??

you DEMAND US dollars!! When a natuion demands US dollars.. it pushes the value of the dollar UP..

The fact many third world economies were virtually forced to use US dollars as currency coupled with the fact that OIL has only ever been traded in US dollars has ensured that USA can borrow at much better rates than any other nation on the planet.. and USa hasnt exactly held back.. it now owns the largest foreign debt on the planet.. which is $7Trillion..

If oil stops being traded in US dollars.. or countries like Phillipines stop using US dollars.. then basically.. the US dollar will collapse.. interest rates in USA will rise to unseen levels.. and I'm talking 25% interest rates could be realistic.. this would destroy the American property market completely.. and also the america sharemarket.. which would have a rebound effect globally..

When USA invaded Iraq.. no one knew that Saddam had just started selling his oil in Euros.. some say this is the real reason Bush invaded Iraq.. because no one had ever sucessfully traded oil in any other currency before.. and Saddam was the first to do so.. Saddam did nothing wrong.. since USA had sanctions on him.. and Saddam had no more weapons (as we now know) so he was not a threat to anyone.. plus Saddam had excellent relations in Europe and Asia.. and could have built Iraq into a mega country if he could have been allowed to do so.. but USA insists by any means that OIL is ONLY traded in US dollars.. and I think the same goes for Phillipines .. attempts ot print your own money will likely result in mass assasinations .. coz USA isnt about to watch its dollar collapse.. its on the verge now since Iran is now trading oil with China.. in EUROS.. now you know why all of a sudden Iran is the biggest threat on the planet.. (according to Bush) despite that Iran has NEVER bothered a soul..

Answer 3

TJ - good answer. I almost wanted to contradict when I read "oil has always been traded in dollars .." but then I read further. Exactly - Iraq was going to start. Other countries will be moving more and more into the Euro, and this can bee seen already when you look at the exchange rate of the US Dollar against other currencies over the past years. The dollar is losing importance worldwide as a foreign currency reserve. Countries trading with th USA will however continue to stock it.

The dollar is definitely in lower demand recently. In the Philippines I think the dollar to individuals is more psychological than anything else. The peso actually isn't "weak" it is strong, even though one "unit" is worth less than one "unit" of another currency (ie: dollar). The nominal exchange rate of two currencies says nothing about their relative strength or weakness - look at the Yen, one peso is worth something like two yen, but I wouldn't say the peso is traditionally stronger, just because one "unit" is worth more. I am a foreigner living in Manila, but only get paid in Pesos - and I'm glad because my savings since I've been here is worth 15% more (converted into Dollars) than it would have been two years ago.

I am a scuba diver, and I was actually surprised to see that many dive shops charge based in US Dollars - as do many resorts. I think this should be illegal. I lived in Russia about 10 years ago, and it was illegal to price anything in foreign currency, only in Rubles - that is how it should be here. The Peso is not going up and down 20% a day or anything - businesses have most of their cost in Pesos, and should charge in Pesos.

Answer 4

There are many overseas Filipino workers in the USA and other parts of the world. They send dollars to their family here in the Philippines for their basic needs in life, education and other needs.
If there are alot of people sending their families here in the Philippines, the peso is getting stronger, however, the dollar is getting weaker.
When the exchange rate was P50.00 per dollar, the average Filipino being sent $1,000 would receive P50,000. However, with the present rate at P48.50, the previous P50.000 goes down to P48.500. P1,500 is alot of difference if the head of the family have 3 children being sent in school. It is already the allowance of their children for how many how days! However, when exchange rate went down, P1,500 would be alot of thing for a family!
We thought it is good for the Philippine economy when our peso is getting stronger. However, some companies, buy materials in the USA and this will affect them alot. Some companies are even cutting down on their workers because of this. Some even got closed!
Peso getting stronger is not always good for all Filipinos!

Answer 5

Our economic system is under the umbrella of US$ currency. So, the global effect of dollars directly affect us in everything; from prices, oil, food, business, etc. The trade balance is that if our economy is gaining positively then the equivalent of dollar to peso is decreasing and vice versa. The more dollar remitances, stock bonds, securities, etc..that we have, the more stronger our economy and peso equivalent to dollar is getting stronger.
In Europe, some countries have their own system of money market. It's not affected by dollar ups and downs.

Answer 6

Sansrival is exactly right, it is ultimately catastrophic for Filipinos who have not fled the country for the economy to be so heavily dollar-dependent. The reason it is that way is because the biggest export of the Philippines is labor, and of all the countries in the world where OFW's can be found, the one most commonly accepted currency is still dollars.

Answer 7

Hey Dude. US Dollars are important. Most international products that we need or desired are sold in US dollars. The gasoline we import, that imported shirt you are wearing are sold in US dollars. Foreign countries doesn't want your peso only US dollars. When we are also making loans we are receiving them in US dollar. When we pay them the principal and the interest we should pay them in USD. The more dollars u have the more stable you are.

Answer 8

It is always a trade ballance. The Peso is weak but getting stronger, the more dollars they have the stronger their economy

Answer 9

To trample over all our economies.

Answer 10

the more dollars we have the better for my country..