| Million said: Hmm interesting , this is something I've always struggled to understand , would you mind explaining further ? |
Well, any manufacturer wants to be paid in a currency that is:
a) stable enough for the time period the manufacturer is interested in. If you live in Zimbabwe, you would have a hard time telling your manufacturer that you pay him in Zimbabwe $...
b) "exchangeable". Manufacturers usually have to buy materials from other manufacturers/raw material providers. If they can pay in the same currency they receive, no hassles with currency transfers (and the transfer organisations _always_ win if such transactions are necessary). Manufacturing contracts may take months to write down and include provisions for payment forms/timelines/hundreds of whatnots. If you had to write in all the various currencies into the contracts and what happens if one currency fluctuates against another currency, this would make one hell of a lenghty contract. And the manufacturing contract for a PS3, for example, is alread likely a several hundred pages thick book...
Oil barrels are paid in US$ because basically the whole oil thing started in the United States and because the US has been the strongest currency historically due to its strong economy. Note that there have been talks about switching to Euros for quite some time now in OPEC, because the US is no longer being considered a strong/the strongest economy by many of its members.
