Hi, I just want to clear down my doubt about the topic.
Replacement of USD as reserve currency in many countries
Is it a good topic for argumentative essay? If yes, please give some ideas about arguments. Thanks!
Yes, it is a very good (though a potentially polarizing and controversial) topic for argument.
Start by asking yourself the question: "What is money?" Well, at one time in America, currency was backed by gold, also known as the gold standard. In other words, $100 in paper money equaled $100 in gold, and could be traded as such.
But at right about the time of the Great Depression in the 1930s, that all changed. The U.S. dollar simply became a symbol of value, so to speak, yet it could not be traded at the bank for its value in gold.
For the sake of argument, here are some of the results of the U.S. dollar not being backed by the gold standard. This is not my own view of things, but rather based on, as Sgt. Joe Friday would say, "Just the facts, ma'am."
1. Increased inflation, which is the combination of rising prices and lower purchasing power of a given currency. This can reduce the value of the U.S. dollar to, well, nothing.
2. The Federal Reserve can and does create money independent of the gold standard. They've created more money in the last year and a half than they have in the entire history of the Federal Reserve.
3. The Federal Reserve isn't part of the government, and therefore isn't officially controlled by government, not even by the President.
I hope this helps!
You could find out further information on Fed and the history of the US's currency in The Creature from Jekyll Island (G. Edward Griffin).
As long as people believe in 'virtual' value of the USD issued by Fed, capital still flows into the US. The US's economy will blow up and go into thin air when this believe vanishes.
Finally, "Don't put all of your eggs into one basket".
