3 ms·

So what does the US - the people of the US - gain by the dollar being this "reserve currency"?

sokoloff 11y ago
The status quo advantages: a (relatively) stable and strong currency, meaning net importers are helped. Of course, that means our exporters are conversely harmed when selling to a location with a weaker currency (as our goods become more expensive). A vacation abroad is similar to a net import. You consume something in a foreign locale paid for with US currency. The confusion I have is your argument of "that can't be the reserve currency advantage, because it's already true", which seems to ignore the (strong?_) probability that it's already true because of being the reserve currency.
- ArkyBeagle 11y ago
  I just suspect that I shouldn't really care what the reserve currency is. If anything, it probably has minor annoyances for Americans. I meant that vacations for people who live in non-dollar places are cheap, goods are cheap. I recall that trips from Canada cost pretty much the same as from the US, taxes notwithstanding. The main complaint I hear about goods is VAT and import duty where applicable.
green7ea 11y ago
Not only is the US dollar the reserve currency but oil is also sold exclusively for US dollars by OPEC. This forces most countries to hold vast reserves of US dollars. The US benefits because they are able to print a ton of dollars which get absorbed by other countries instead of causing inflation. This allows the US to import goods for 'free' (in exchange for printed money). This is especially true for institutions which are close to the printing presses (the gov., big gov. contractors). This is what allows the US to have such an extravagant military spending.
- ArkyBeagle 11y ago
  SFAIK, anybody who has kopecs, roubles, yuan or lira can exchange them freely and instantaneously for dollars ( albeit probably for a fee ). Those US dollars printed that get stuffed under mattresses don't actually... exist, in a way, wrt to US monetary policy. The military spending is the same as for everything else.

The status quo advantages: a (relatively) stable and strong currency, meaning net importers are helped. Of course, that means our exporters are conversely harmed when selling to a location with a weaker currency (as our goods become more expensive). A vacation abroad is similar to a net import. You consume something in a foreign locale paid for with US currency. The confusion I have is your argument of "that can't be the reserve currency advantage, because it's already true", which seems to ignore the (strong?_) probability that it's already true because of being the reserve currency.

ArkyBeagle 11y ago
I just suspect that I shouldn't really care what the reserve currency is. If anything, it probably has minor annoyances for Americans. I meant that vacations for people who live in non-dollar places are cheap, goods are cheap. I recall that trips from Canada cost pretty much the same as from the US, taxes notwithstanding. The main complaint I hear about goods is VAT and import duty where applicable.

green7ea 11y ago

Not only is the US dollar the reserve currency but oil is also sold exclusively for US dollars by OPEC. This forces most countries to hold vast reserves of US dollars. The US benefits because they are able to print a ton of dollars which get absorbed by other countries instead of causing inflation. This allows the US to import goods for 'free' (in exchange for printed money). This is especially true for institutions which are close to the printing presses (the gov., big gov. contractors). This is what allows the US to have such an extravagant military spending.

ArkyBeagle 11y ago
SFAIK, anybody who has kopecs, roubles, yuan or lira can exchange them freely and instantaneously for dollars ( albeit probably for a fee ). Those US dollars printed that get stuffed under mattresses don't actually... exist, in a way, wrt to US monetary policy. The military spending is the same as for everything else.