Question

Where Are All the U.S. Dollars?

The almost $4,000 of U.S. currency held per person in the United States is a surprisingly large number. U.S. currency is bulky, can be easily stolen, and pays no interest, so it doesn’t make sense for most of us to keep a lot of it. Do you know anyone who carries $4,000 in his or her pockets? We have a puzzle: Where are all these dollars, and who is holding them? Criminals are one group that holds a lot of dollars. If you were engaged in illegal activity, you would not conduct your transactions with checks because they are traceable and therefore a potentially powerful piece of evidence against you. That explains why gangsters like Tony Soprano much cash have so buried in their backyards. Some businesses like to retain a lot of cash because, if they operate as a cash business, it makes their transactions less traceable; thus, they can avoid declaring income on which they would otherwise have to pay taxes. Foreigners are the other group that routinely holds U.S. dollars. In many countries, people do not trust their own currency because their country often experiences high inflation, which erodes the value of that currency; these people hold U.S. dollars as a hedge against this inflation risk. Lack of trust in the ruble, for example, has led Russians to hoard enormous amounts of U.S. dollars. More than half of U.S. dollars are held abroad.

discuss where the U.S. dollars are?

Answer 1

A global currency in one that is accepted for trade through our the world. The U.S dollar is the most popular currency.

It makes up 64 percent of all known central bank foreign exchange that makes it the defacto global currency,

The relative strength of the use economy supports the value of its currency. It's the reason the dollar is the most powerful currency.

The role of the dollars as a world currency. More than one-third of the world 's gross domestic product come from countries that peg their currencies to the dollar that includes seven countries that have adopted the dollar.

In the foreign exchange market the dollar rule more than 85 percent of forex trading involves the U.S dollar.

The financial crisis made the dollar even more widely used. l