A Weaker Dollar and a Receding US Influence : Kamel Wazneh
Central banks worldwide began discarding the dollar in favor of the euro in an attempt to minimize their losses following the decline in the value of the US currency. An opinion poll conducted by the Management Trend research firm showed that more than two thirds of the world's central banks have reduced their exposure to the US dollar. According to the poll conducted in 2005, 65% of central banks, managing more than two trillion US dollars, have begun to realize that the US currency cannot be relied on for these banks' reserves. The drop in the exchange rate of the US dollar was also linked to a poll conducted by German economic departments, which revealed an increase in the levels of confidence in the performance of the European economy to a 15-year-high.
The increased strength of the euro comes as US citizens and the US government enjoy the most favorable terms in the international trade exchange, as they borrow trillions of dollars worth of commodities, housing, and military funding from abroad at a cost of borrowing that does not exceed 5%, while at the same time, returns on US foreign investments exceed 20%, leading to a situation in which the US foreign debt reached $13.6 trillion, or $119,000 owed by each American household.
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