The Dominance of the Dollar

The Dominance of the Dollar

The basic hypothesis is as follows: in the long run, there are no more profitable financial instruments (in a comparable comparison) than assets issued in the dollar financial system.

Comparative Analysis of Financial Assets

A first approximation analysis of financial assets in the twenty leading countries in the world allows us to conclude that the dollar-denominated equity market of national issuers loses to the U.S. market in the long run. This applies to both developed countries (Japan, Europe, UK) and developing countries.

This hypothesis is true in almost any long-term timeframe, with rare exceptions. During crises, the US market falls less intensively than the markets of other countries and recovers more intensively.

Features of the US Financial Market

The US consolidates at its core all the world's capital, having the most developed, liquid, and capacious financial market, a wide range of financial instruments/assets, a powerful and diversified economy with a higher growth rate than the economies of other developed countries. All of this is complemented by an open financial system, unified legislation, and an understandable and adaptive geo-cultural code.

Despite the scale and success of the Chinese economy, the yuan will not be able to claim the laurels of the dollar system because of restrictions on capital flows, specific legislation, and an alien geocultural code incomprehensible to Western civilization.

This is largely why the Japanese market is predominantly closed with a small concentration of non-residents.

Conclusion

Thus, the hypothesis that assets issued in the dollar-based financial system are the most profitable and sustainable option for long-term investment is confirmed by a comparative analysis of financial assets around the world.

Table of contents
  1. Comparative Analysis of Financial Assets
  2. Features of the US Financial Market
  3. Conclusion