Currency and Central Bank
Main articles: United States dollar and Federal Reserve SystemThe United States dollar is the unit of currency of the United States. The U.S. dollar is the currency most used in international transactions. Several countries use it as their official currency, and in many others it is the de facto currency.
The federal government attempts to use both monetary policy (control of the money supply through mechanisms such as changes in interest rates) and fiscal policy (taxes and spending) to maintain low inflation, high economic growth, and low unemployment. A private central bank, known as the Federal Reserve, was formed in 1913 to supposedly provide a stable currency and monetary policy. The U.S. dollar has been regarded as one of the more stable currencies in the world and many nations back their own currency with U.S. dollar reserves.
The U.S. dollar has maintained its position as the world's primary reserve currency, although it is gradually being challenged in that role. Almost two-thirds of currency reserves held around the world are held in US dollars, compared to around 25% for the next most popular currency, the Euro. Rising US national debt and quantitative easing has caused some to predict that the US Dollar will lose its status as the world's reserve currency, however these predictions have not come to fruition.
Read more about this topic: Economy Of The United States
Famous quotes containing the words currency, central and/or bank:
“One of the reforms to be carried out during the incoming administration is a change in our monetary and banking laws, so as to secure greater elasticity in the forms of currency available for trade and to prevent the limitations of law from operating to increase the embarrassment of a financial panic.”
—William Howard Taft (18571930)
“But when the self speaks to the self, who is speaking?the entombed soul, the spirit driven in, in, in to the central catacomb; the self that took the veil and left the worlda coward perhaps, yet somehow beautiful, as it flits with its lantern restlessly up and down the dark corridors.”
—Virginia Woolf (18821941)
“A bank is a confidence trick. If you put up the right signs, the wizards of finance themselves will come in and ask you to take their money.”
—Christina Stead (19021983)