so, why should i care about Euro/US Dollar ratio?

hi everyone, Pro tian will teach economy class again. Don't write on your notes yet, i want you to keep your heads up and THINK.

So, why should you care about Euro/US dollar ratio? Because it is directly related to inflation, employment rate and US dollar buying power. Let's be more specific: every American somehow owes debt if they ever use credit card. If the total national debt is, say 12 trillion dollars, the total cash amount should be at least 12 trillion dollars, otherwise the debt will never be paid off. When the debt increases to 14 trillion dollars, another 2 trillion dollars cash bills need to be printed. This causes inflation, ie, the true buying power of US dollar decreases. So, why is inflation rate of US dollar (~2%) relatively lower than other country, say China Yuan? It is because other countries buy US dollar bills to preserse their economy. It's like store some gold under your bed in old time. Those smaller countries buy some US dollars, just in case when their countries' economy system go poor, This keeps US inflation rate lower and debt system running. However, the smaller countries only buy most stable currencies that they trust, when Euro/US dollar keeps going up, more funds will shift into Euros and inflation rate increases. Euro/US can not go up constantly for too long, otherwise the investors will switch their funds from their business to this foreign currency exchange market, which will cause employment rate lower.


But don't worry, the US and European central banks and big companies will make sure nothing go wrong. What should we do to help the economy? I don't know, I am just a pro, not an advisor.
p.s. A little inflation is actually healthy. Actually inflation can not go too low, because that means there is not enough expend demand which is bad for economy.