History of "DOLLAR $" Becoming International Currency

Starting from the Bretton Woods agreement after World War 2 that the effect is still felt to this day; agreement to use gold as a global standard currency values. At that time the economic situation world countries except the United States, devastated by war. This causes them to rely on loans granted by the United States.
The loan is given in U.S. dollars. As collateral, the United States receives the gold owned by these countries. As a result, the United Auto mastered all the gold in the world and become only the U.S. dollar value is backed by gold.

In practical terms, this means the U.S. dollar has replaced gold as a source of liquidity in the world economy and become the basis of the world's financial system. The implication, every country to build reserves in U.S. dollars; dollar reserves required for the respective country's currency can be exchanged for dollars or gold. At this time it was the U.S. currency becomes an international currency.

The second reason: the risk becomes an international currency

Not always become an international currency that has a positive effect on countries that have a currency that, in this case American countries with the dollar. Many negative effects that could hit America when the currency becomes an international currency. Some negative effects become an international currency, among others:

1. The country had to maintain trust, which causes it to have a tough task for the world.

2. If the owner of an international currency is not able to maintain trust, it can cause the currency drop suddenly.

3. It would be more difficult in controlling liquidity

The third reason: not all that strong currency could become an international currency

To become an international currency needs a strong owner, in this country strong. Being a strong currency does not mean able to become an international currency. This is because countries that have currencies that do not necessarily have the economic and political stability is good. Yet to become an international currency, it takes a country with economic and political situation is stable, because as an international currency is needed trust from the world for the world to use it.

For example, the currency of the country of Iraq, the dinar. Although currently dinar as one of the strongest currencies, but the state of Iraq is unstable, because of war, internal conflict, and its economy. This causes the world does not want to entrust its currency to the Iraqi Dinar currency because although it is strongest, but not necessarily in the long term will be stable.

Unstable can occur because of the war that is increasingly becoming-so or conflict in a country which can ultimately lead to the country's impoverished and its currency fell to the weakest currency. Whereas exchange currency and store it is a long-term activities, so it takes great confidence from the world. This is because the U.S. dollar became the currency of the world because it is believed that the country can be predicted to be stable in the long term