What will happen to the U.S. economy if the world decides to use Euros instead?

Question

What would be the consequences for the U.S. economy if it did happen?

Answer 1

Not much really...maybe some inflation in the short run as the domestic money supply increases, but if the Fed is smart about it, they'll take the money out of circulation.

Answer 2

If the euro replaces the dollar as the most commonly used currency for international transactions and for other countries' foreign cash reserves, the dollar will drop in value, due to the lower demand for it.

This will make imported goods here in the U.S. more expensive - stuff made over in China will cost us more. Imported oil will cost more. Cost of living goes up, quality of life (maybe) suffers.

On the upside our exports more competitive, meaning more and better manufacturing jobs.

Answer 3

Fortunately, "The world" does not exist. Some big money users have already shifted to Euros, I was trading currencies in the Forex when that happened and the dollar dropped a few points.

MINOR shift in price because some oil king who happens to have a few hundred billions, is still only a drop in the bucket on the global currency exchange.

I would not worry about it, if I were you.

Because:

- whether or not it does, there is absolutely nothing that you or I can do about it

AND

- many many many financial institutions would have to all agree (LOL like when is THAT going to happen?) that they would start buying and selling of gold and oil for EUR instead of USD.

Since the politicians - oh no I won't go there. Don't like to use generalizing statements of a negative nature. Let me put it another way. I notice in my own democracy, how long it can take for simple facts to become obvious that the political machinery moves so that something is changing in the outside world. It takes a long time!

Wonder if we are the country with the most political parties? Answer, we probably are. (I live in Europe)

What I mean is, if it is already so difficult to have a minor change in a democracy, one country, where all people are supposed to have the same interests.

HOW LONG would it take to have agreement on such a major issue on an international scale?

Answer 4

Euro is lossing favor even in Europe.  US wont do it cause we have our own currency, thank you.