Foreign Currency Exchange
Foreign central banks are tasked with repurchasing domestic production, consumed by the US with fiat US dollars, with domestic currency in order for the US-consumed production to be placed back into the domestic economy.
What do banks do with all these dollars?
Dollar Asset and Trade Balance
If the US dollar were an asset, foreign central banks would have no need for such policy; and if nations, like China, did not produce more than they consume then the US could not run a trade deficit.
Money Creation
Every nation incapable of printing US dollars (everyone but the US) is poorer than every nation capable of printing US dollars (the US). If the US does nothing more than print dollars to purchase and consume the world's resources in the name of free-market fundamentalism, why then should any nation not do likewise?
Benefiting From Trade
John Keynes showed that it is possible for both sides of an exchange to benefit from the exchange. Trade, both intra- and inter-national, benefits the overall world society; but how does the trade of currency benefit society?
Foreign Demand for Domestic Savings
Foreign central banks are tasked with repurchasing domestic production, consumed by the US with fiat US dollars, with domestic currency in order for the US-consumed production to be placed back into the domestic economy.
What do banks do with all these dollars?
Dollar Asset and Trade Balance
If the US dollar were an asset, foreign central banks would have no need for such policy; and if nations, like China, did not produce more than they consume then the US could not run a trade deficit.
Money Creation
Every nation incapable of printing US dollars (everyone but the US) is poorer than every nation capable of printing US dollars (the US). If the US does nothing more than print dollars to purchase and consume the world's resources in the name of free-market fundamentalism, why then should any nation not do likewise?
Benefiting From Trade
John Keynes showed that it is possible for both sides of an exchange to benefit from the exchange. Trade, both intra- and inter-national, benefits the overall world society; but how does the trade of currency benefit society?
Foreign Demand for Domestic Savings
If a nation, like China, can print its own currency, buy its own surplus production, and purchase OPEC oil with its own fiat currency, what motivation then does anyone in China have in acquiring fiat US dollars? Would there be foreign demand for US domestic savings?
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