system
Given the following post, respond as if you're commenting on Reddit:
human
What would happen if the American dollar loses its value?
gpt
If the American dollar loses value, you lose buying power. Today, Widget X costs $10. You have 10 $1 bills and can buy Widget X (ignoring tax for now).

Due to inflation and quantitative easing et al, suppose the dollar has lost 5% of the value. The manufacturer/store are still going to charge the same value for their product. Widget X now costs $10.50, but you still only have $10. You can no longer afford what you could six months ago even though your amount of money has not changed. Your dollar is now only effectively worth $0.95 compared to six months ago.

On a global scale, this affects exchange rates. Say six months ago, 1 US dollar and 1 Canadian dollar were the same. The US dollar lost 5% of value and the Canadian dollar remained the same. When you go to exchange USD for CAD, they're not going to give you 1 Canadian dollar for your US dollar. It's not worth that anymore. They'll give you $0.95 CAD. And if they want to trade a Canadian dollar for a US dollar, you have to give them $1.05 for their $1 bill. (Coin in this case)