magazine titles: HARVARD BUSINESS REVIEW
THE DOLLAR TRAP
since the global financial crisis,
speculation has been rampant about it is looming if not imminent displacement
as the world’s leading currency. ; the united states faces high and risling
public debt , risks created by the fed’s aggressive use of unconventional
monetary policies, and political dysfunction. Such factors might be expected to
set off an economic decline, eroding the dollar’s importance. financial crisis
has actually strengthened the dollar’s position as the predominant store of
value in the world. True, its role as a medium of exchange may shrink over
time.
Emerging economies have a stronger incentive
than ever to accumulate foreign exchange reserves as insulation against the
consequences of volatile capital flows. government bonds of many other major
economies , such as the euro zone , japan , and the UK, look shakier in the aftermath
of the financial crisis. Moreover , even central banks, such as the bank of
japan and the swiss national bank, are engaged in monetary operations that will
weaken their currencies. They are also intervening directly in foreign exchange
markets to prevent currency appreciation, serving the demand from the rest of
the world for safe assets.
It may seem that this” dollar trap”
is an unstable equilibrium with big risk for the global economy. All this has
important implications for businesses especially multinational as financial transactions will increasingly
be intermediated in the currencies of the countries concerned rather than in
the dollar for example cina, Renminbi.
With rising capital flow and
currency volatility, some exposures will become increasingly important. dollar’s
value resume its decline against the currencies of emerging economies, owing to
differences in productivity growth between the united states and those
economies. Mostly for want of a better alternative, it will remain the dominant
reserve currency dollar for a long time to come.
20 words that
are difficult to understand :
1. increasing
= meningkatkan
2. mminent = dekat
3. displacement
= pemindahan
4. unconventional
= inkonvensional
5. predominant
= utama
6. shrink =
menyusut
7. securitie =
surat – surat beharga
8. safeguarding
= pengamanan
9. epicenter =
pusat gempa bumi
10.
tightening = pengetatan
11.
accumulate = mengumpulkan
12.
volatile = volatile
13.
regulatory = peraturan
14.
engaged = bertunangan
15.
Equilibrium = keseimbangan
16.
Precipitate = mengendapkan
17.
Repercussions = akibat
18.
Paradoxically = paradox
19.
Corporations = perusahaan
20.
Increasingly = makin
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