Declining American Dollar Damages Foreign Policy
The declining American dollar is causing damage to foreign policy.
Saudi Arabia and the United States have been friends for some time. To
the average public within the country most Americans view Saudi Arabia
as sponsors of terror citing the countries Muslim background. However,
Saudi Arabia regularly supports the United States and has done so again
in the last round of OPEC meetings. Venezuela and Iran wanted
to open discussions about valuing oil against a new currency standard
then the dollar. They were hoping the move would be symbolic that the
world should move away from seeing the United States as a leader and
move towards some other supper power like China or the European Union. The
12 member OPEC dignitaries flew into Riyadh and Saudi police and
helicopter blocked roads, and protected the sky with helicopters and
the dignitaries made it to their place of residency. The meeting was
called to discuss oil exports and the cost of oil. In addition, the
meet is to ponder ways of reducing emissions. A secret
broadcast came around which showed that Venezuela and Iran were behind
the move to change how oil is priced into another currency. Venezuelan
representative Angela’s de Morais stated, “The weakness of the dollar
is affecting us all” and “But that's a global-scale problem. It's not
for an individual organization to tackle.” He was referring to Saudis
insistence on keeping the American dollar. Saudi Arabia
doesn’t want to see the American dollar collapse as much of its economy
is based on the American dollar. They have hundreds of billions of
dollars invested within the United States and removing the dollar as
the oil pricing standard may make it decline further which is likely to
hurt Saudi Arabia further. The dollar has declined
significantly over the past few years. This decline is up to 15%
against the Euro in the past 12 months alone. As the dollar deflates
American buy less products from overseas which hurts our allies and
business partners. In addition, the decline in the dollar reduces the
value of investments made by foreign countries in the Euro. When
countries purchase American dollars or make investments in American
dollars they can find that the dollar is deflating which means they are
losing money on their investment. Each dollar is worth less then it was
a few years ago and therefore their investments have shrunk. To counter
this a number of countries have begun to diversify their holding in
foreign currency to more stable currency like the Euro. The
declining value of the dollar is a double-edged sword for the United
States. On one end the declining dollar increases American exports
because American products become cheaper but on the other end America
has less foreign influence because countries aren’t selling as many
products in the United States. The current crisis the country
has to face is the amount of dissention that a number of disgruntled
countries are beginning to show now that their economies are not so
tightly tied to the U.S. We may see a growing trend of countries
attempting to hurt American interests and business partnerships around
the world.
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Murad Ali is a three-time book author , a human resource professional, a doctoral candidate and a business professor. He runs Article-Agent, or which is designed to help business increase visitors, exposure and rank higher among search engines. For more interesting articles visit http://www.thenewbusinessworld.blogspot.com
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