IS IT THIS THE TIME FOR A UNIVERSAL CURRENCY?

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Moses Solemon

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Nearly 67% of the world trade and assets are valued by the United States Dollar. But what happens if the political polarisation and tensions grow wilder as the 2024 elections nears very fast. And why the world will need a more stable currency, very fast?

And will the United States of America take the world hostage of its own internal political and economic challenges, which rest of the world has nothing to do with?

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Predicting the future of any currency, including the U.S. Dollar (USD), is inherently uncertain and depends on a myriad of factors. As of my last knowledge update in January 2022, I don't have real-time information on specific events or developments after that date. However, I can offer some general insights into how political and economic turmoil might impact a currency and they are as the following:

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1.?? Economic Stability:

Political and economic turmoil can influence investor confidence. If there is a perception that the turmoil is negatively impacting the U.S. economy, it could lead to a decrease in demand for the USD. Economic stability, sound fiscal policies, and effective governance are crucial for maintaining confidence in a currency.

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2.?? Interest Rates and Monetary Policy:

The U.S. Federal Reserve plays a key role in influencing the value of the USD through its monetary policy, including decisions on interest rates. If there are concerns about political instability affecting the Fed's ability to pursue effective policies, it may impact the USD.

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3.?? Global Events and Trade Relations:

The USD is influenced by global economic and political dynamics. Trade relations, geopolitical events, and global economic conditions can all have an impact. Turmoil that affects international trade or diplomatic relations may influence the USD's standing in the global market.

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4.?? Investor Perception:

Investor perception is a significant factor. If investors believe that political turmoil may lead to economic mismanagement or uncertainty, they may seek alternative currencies or assets, affecting the USD.

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5.?? Debt and Fiscal Policy:

The level of government debt and fiscal policies pursued during times of turmoil can impact the currency. Excessive debt or perceived fiscal irresponsibility may lead to concerns about the long-term value of the USD.

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6.?? Role as a Reserve Currency:

The USD's status as the world's primary reserve currency provides it with a level of stability. However, if geopolitical events erode confidence in the U.S. economy or governance, there could be discussions about alternative reserve currencies.

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It's important to note that the future of USD is uncertain, and multiple factors interact in complex ways. Governments, central banks, and global economic conditions all contribute to the value and stability of a currency. Additionally, public perceptions and market sentiments play a crucial role in currency dynamics.

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This is Why the Financial Institutions and Money Systems Will Need a Universal Reserve and Asset Valuation Standard. It may be Digital, Stet-Backed, and Gold-Supported Currency.

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The idea of a state-backed and gold-linked digital currency is rooted in the desire to combine the benefits of modern digital transactions with the stability traditionally associated with gold-backed currencies. Here are some reasons why proponents argue that the world needs such a currency:

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A.?? Stability and Confidence:

Gold has been historically viewed as a stable store of value. Linking a digital currency to gold can provide confidence in its value, reducing the risk of inflation and currency devaluation.

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B. Reduced Volatility:

Cryptocurrencies like Bitcoin, while decentralized and innovative, can be highly volatile. A gold-backed digital currency might offer a middle ground, combining the advantages of blockchain technology with the stability of precious metals.

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C.?? Global Trade and Reserve Currency:

A state-backed and gold-linked digital currency could facilitate international trade by providing a trusted medium of exchange. It might also become a candidate for a global reserve currency, potentially reducing dependency on the US dollar.

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D.?? Intrinsic Value:

Gold has intrinsic value due to its use in various industries and as a precious metal. This characteristic could provide additional confidence in the value of a currency backed by gold.

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E.??? Familiarity and Tradition:

Gold-backed currencies draw on a long history of using precious metals as a basis for money. This familiarity might make it easier for people to adopt and trust a digital currency linked to gold.

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F.??? Security and Efficiency:

Digital currencies can offer secure and efficient transactions, reducing the costs and risks associated with physical cash handling. Combining these benefits with the stability of gold could create a robust financial system.

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G.?? Hedging Against Economic Crises:

Gold is often seen as a hedge against economic downturns and financial crises. A gold-backed digital currency might provide a safer haven for individuals and institutions during turbulent economic times.

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H.?? Government Control and Regulation:

State backing can bring a level of control and regulatory oversight to the digital currency space. This might address concerns related to illicit activities and enhance the stability of the financial system.

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It's important to note that while the concept has its merits, there are also challenges and criticisms. These include issues related to the practicality of implementing and managing a gold-linked digital currency, potential limitations on monetary policy, and the evolving nature of the global financial landscape. The discussion around state-backed digital currencies continues to evolve, with various countries exploring their own initiatives.

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