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MONEY

Money And Monetary Policy

The world of trading is tightly connected to the economy of the country where the trading takes place. Perhaps the single most important measure of a country’s status and stability is its economy (financial standing), and the single most important instrument of an economy is its currency.

A country with a healthy prospering economy would see increased demand for its currency, thereby making it more desirable to own. If the trend continues, the currency could be propelled to an international status as the US Dollar is today. The US currency is quickly recognized and can be promptly exchanged for the local currency almost anywhere in the world. In some countries, shops and stores accept (or even prefer) US Dollars directly as payment for their goods as they believe that it gives them a better value than their local currency.

The US Dollar hasn’t always had this standing but as the country became an economic powerhouse beginning with the industrial revolution of the 1930s its currency gained power as well. Take Germany as another example. The country emerged from World War II in 1945 divided with its economy in shambles on both sides, east and west. Under the Western rules (USA, UK, and France) and through the determination of its people, West Germany was able to rebuild in a short period and become a formidable economy in Western Europe. Its …