Why the dollar rules the world – And why its reign could end
“[The exorbitant privilege] is both a boon and a curse. It is a boon because the country that emits the leading international reserve currency can have trade deficits without worrying about a growing foreign debt. Because the American foreign debt is in the country’s own currency, the government can always honor its foreign obligations as it can produce any amount of money that it wants in its own currency. Yet the international reserve status comes also with the curse that the persistent trade deficits weaken the country’s industrial base. Instead of paying for the import of foreign goods with the export of domestic production, the United States can simply export money.”
USAGOLD note: Comparing the United States today to imperial Spain at its height, the author ends with some interesting thoughts on how the end of king dollar’s reign might evolve.
Repost from 8-14-2019