Since the early 1970's, the value of the US dollar has been steadily declining due to rising price levels and the increase of US dollars in circulation. This drastic currency weakening has caused the US dollar's purchasing power to drop by 98%. Additionally, the money supply in the US rose from $4.6 trillion in 2000 to $19.5 trillion in 2021. This devaluation of the US dollar, particularly in light of international trade developments, is cause for concern.
As recent examples, Saudi Arabia’s finance minister, Mohammed Al Jadaam, has just indicated a willingness to trade with alternative currencies, while the BRICS nations have been actively challenging the US dollar’s dominance in global trade. The brink of a possible US banking crisis was also discussed by the Federal Reserve in the March’s Meeting of the Federal Open Market Committee, with an expected recession later this year should the financial sector disturbances continue.
The Federal Reserve has implemented measures to manage inflation, however, the scale of these efforts remains to be seen in order to reinstate confidence in the US dollar and safeguard the stability of the US economy.
Yana Long
- 2023-04-15
Devaluation of US Dollar Causes Concern
This article examines the US dollar's devaluation, the money supply increase and rising price levels. It also looks at the US banking crisis and international trade developments, and the Federal Reserve's efforts to restore confidence in the US dollar.
