The US dollar has come a long way since its introduction in 1792. Over time, it evolved into the world’s reserve currency, holding the highest level of confidence and liquidity, surpassing all other currencies in circulation.
In times of geopolitical turmoil, and a lack of trust in other monetary systems, the US dollar becomes the currency of choice of foreigners and foreign institutions that convert and park their money in US dollars. The currency closely associated with the history of a nation that became the dominant power of the world. This power is eminently represented in the trust in the US dollar. There are 20 countries using a currency called ‘dollar.’ However, the US’ economic dominance eclipses the visibility of all other dollar denominations in circulation.
The foreign exchange, called ‘FX’ or ‘forex,’ is the marketplace where countries from around the world exchange currencies. It is the largest market in terms of trading volume, surpassing the credit markets and the trade of goods and services. About half of the approximately $5 trillion of transactions that are settled daily are denominated in US dollars.
It is estimated that approximately 70% of the physical paper dollars in circulation are held outside the United States, mostly in $100 notes.
What helped make the US dollar the reserve currency is exemplified by the fact that a dollar issued in the 1860s is still a legal tender today, unlike the fate of many other currencies.
Federal Reserve Notes, are commonly known as money: Amedium of exchange that guarantees the fulfillment of a transaction. Its value is generated by confidence in the government and its institutions to manage the economy in a trustworthy and competent manner. These institutions would not exist without the underlying reality that a currency is backed by the total productive capacity of its people.
There are approximately 30 million small businesses in the United States. They hire close to 60 million workers. A small business is defined as a businesses with fewer that 500 employees. To be fair, the total number small businesses includes individuals that are independent contractors. Overall, these businesses account for 97% of all economic activity in the US.
Communities across the nation rely on individuals and small businesses for production of jobs, goods, services and the general economic well-being of the population. The the sum production of all goods and services generated by the US workforce is defined as Gross Domestic Product (GDP). It creates revenues and profits that is taxable income levied by various levels of government, who in turn distributes the money for public works, services, social benefits and the defense industry.
The total productive capacity of Americans is generated by entrepreneurial spirit and all types of of labor, beginning with the settlers and all other immigrants that followed who came from varied parts of the world to the US to benefit from and contribute to the economy. They enabled the creation of a global network of contacts that favored global trade and economic growth.
As Alexis de Tocqueville observed during his journey in the country, Americans are not concerned by lofty ideals of virtue or righteousness. They are driven by self-interests, profits and wealth, principles that underline the American Way of life.
America’s entrepreneurial spirit produced the US’ dominant role in the world economy. It is secured by its military power and the global reach of Corporate America. And is responsible for US’ dollar status as the reserve currency of the world.
The strength of the US dollar will inevitably cause dislocations to other currencies and the world economy. When this happens, a reassessment about its role as a reserve currency will likely occur, and a new era in the global economy will unfold.
Read more about the symbols on US Dollar here.
To conquer fear…
On April 9th my mother passed away at the age of ninety of heart failure. She expired her last breath in a Montreal hospital after being transferred from her senior care facility. She felt lost and alone during the last days of her life. None of her children could visit and be at her side because of the lockdown.
Elda Pietrella was born on August 28th 1929, weeks prior to the Crash of 1929 and died at the height of the covid-19 fear of contagion that infected and paralyzed a normally working society.
She lost her father when she was 15. He died while her mother, my grandmother Augusta, was pregnant with my uncle Toni. She was the oldest daughter with one sister and two brothers. After completing her fifth grade she left school to work at a farm in the outskirts of a small town of Provesano in Friuli, Italy, to help support her family. She lived through the folly and devastation of the Second World War.
She met my dad Giuseppe Rizzotti in a neighboring town of Barbeano. They got married on May 7th 1949.
She joined my father in Tangiers International were he had found work. The city where I was born. Two years later political change was brewing under the surface and my father, mother and I went back to Spilimbergo, Italy, were my sister Antoinette was born.
The lack of work in Italy compelled my father to move to Montreal, Canada. Three years later my mother, my sister and I left Naples and sailed across the Atlantic and landed in Halifax, Canada: A long train ride away from Montreal, Quebec.
One year later, in 1957 she gave birth to my brother Jimmy. Her children were born in three different countries/continents.
My dad was a ship. My mother was his harbor…
Last time I saw my mother less than a year ago, she told me about when she was pregnant with me, that women had warned her to get ready for the pains of childbirth. She revealed with a smile that I popped out with ease. She felt no pain, only joy.
She was a beautiful and loving mother, unconditionally devoted to her family, and tough as nails.
I am the intertwining union of my parents genes, the flesh and blood of my mother: A wholly trinity.
She will always live in my heart.
She leaves behind in sorrow, her children: Michael, Antoinette, Jimmy and her grandson Gabriel. And all the people she graced by her presence…
The title of this post is a quote from Franklin D. Roosevelt’s inaugural speech. He was the 32nd president of the USA from 1933 until his death in 1945, spanning the depths of the Great Depression to the end of the WWII.
Fear is the contagious disease we need to fight against. It is infecting people’s mind and bodies; not only our biological bodies but mostly our social bodies.
We are at war with an invisible enemy of biological origins that has generated a global contagion of confinement and retreat, unprecedented in the history of the world.
This fear has propelled a fragmentation of social bodies and set in motion the destruction of world economies. This destruction will degenerate in civil unrest, violence and world conflicts.
Fear alters the perception of reality and incapacitates the ability for individuals to reason normally: Only a minority of people will be infected and die due to diagnosed covid-19, whereas a great majority of people will be infected and affected by the destruction of the economy.
To win the war we must not retreat but face the enemy heads on. Like any war we must move forward and expect casualties.
The propagated remedy so far will be far more destructive to humanity than the biological virus itself.
CUI BONO: Who benefits from propagating the destruction of the economy?And for what reasons?