Sorry Zerohedge: For Better or Worse, US Dollar Will Remain the King of Currencies

Contact Your Elected Officials
Revolver.News Header

The U.S. dollar will someday lose its status as the global reserve currency, but it is delusional to think that this will happen on a timescale short enough to affect domestic politics.

Those who anticipate a collapse of the dollar often subscribe to an โ€œimperialโ€ theory of currency zones. They argue that the U.S. dollar is held by other countries because the U.S. military implicitly (and perhaps occasionally explicitly) threatens foreign banks or governments: โ€œIf you donโ€™t use our currency, we will give you the Qaddafi treatment.โ€ The people who hold this view essentially believe that military power underlies U.S. dollar (USD) hegemony and that our allegedly deteriorating military capabilities and recent losses portend a wider depreciation of the dollar.

As the conflict in Ukraine suggests, this view is obviously false on a short time horizon. First, the premise is probably false: the U.S. remains the worldโ€™s preeminent military hyperpower. Russia cannot project power more than a few hundred kilometers outside of its borders. Chinaโ€™s ongoing demographic crisis rules out a military reconquest of Taiwan in the foreseeable future. Second, for the sake of argument, let us concede that the U.S. military capacity is on a relative decline: the dollar has continued to rise relative to the Euro and the Chinese renminbi even after the U.S.โ€™s ignominious withdrawal from Afghanistan. The U.S.โ€™s attempts to remake the Middle East are a clear signal of imperial insanity if ever there was one, but the USD has continued to appreciate against its competitor currencies. But how does this argument hold up when projected into the longer time horizon, to, say, 2030 or 2050?

If history is any guide, a country can continue to maintain its status as the global reserve currency long after its economic and military power has diminished relative to peer nations. Consider the previous global reserve currency, the U.K.โ€™s gold-backed pound sterling. Even as the U.K.โ€™s relative economic and military power declined, it took World War II and a complete restructuring of the financial system (orchestrated by the U.S.) to displace the pound as the top foreign currency holding. This historical perspective seems to suggest an alternative perspective to the โ€œimperial viewโ€ described above. The more likely possibility is that foreign nations do not hold dollars principally due to some immediate or implicit threat of military force, but simply because it is most convenient to hold dollars. It is convenient to hold dollars, in turn, because they can be used for a variety of international financial and trading activities, because most countries held dollars yesterday, and are expected to do so tomorrow, especially when the alternative is holding crappier local non-USD currencies.

By Jeremiah Jackson, Ph.D.

Read Full Article on Revolver.News

Revolver News
Revolver Newshttps://www.revolver.news/
Revolver News links to conservative and alternative stories bringing readers real-time news, cutting-edge analysis, and insider info. Always Looking for the truth!

Now Lawyers Are Looking for the Epstein List, Too!

So it turns out that when FBI Director Kash...

Remember Epsteinโ€™s โ€œLittle Black Booksโ€?

Image of Bill Clinton getting a massage from Jeffrey...

On the Major Leagueโ€™s periphery: A major trip through the minors

For Nick Dunn, the trek through the minors is a trifecta of physical, mental, and organizational hurdles filled with politics, roster volatility, and injuries.

Private Citizens are Now Looking into Epstein Client List

Most Americans have never felt so betrayed and confused by a president and his admin as they are by the Trump admin over the Epstein client list issue.

Peace In Ukraine Wonโ€™t End The Westโ€™s Hybrid War On Russia

The Westโ€™s Hybrid War on Russia to follow peace in Ukraine is inevitable due to neoconservatives and liberal-globalists in its decision-making ecosystem.

Hackers Target Appleโ€™s Mac Users With New Malware Hidden in Popular Apps

MacOS malware, ZuRu is targeting Apple users, embedding malicious code and a hacking tool into popular utilities used for remote connections and server management.

Fetterman Backs ICE, Calls Abolition Push โ€˜Outrageousโ€™

Sen. Fetterman voiced support for ICE, calling demands to dismantle the agency โ€œinappropriate and outrageous.โ€

DOJ Shuts Down Investigation on T-Mobile-UScellular Merger

DOJ no longer opposes the merger of T-Mobile and UScellular and has closed its investigation into the matter, the department said in a July 10 statement.

Trump Visits Central Texas, Epicenter of Catastrophic Flood That Killed More Than 120

President Trump landed in Central Texas for first-hand look at damage from devastating flood claiming the lives of more than 120 people statewide.

State Department Says Reorganization Plan to Move Ahead Quickly After Supreme Court Ruling

State Dept to reorganize plans following Supreme Court's allowing Trump admin to proceed with layoffs of fed workers and overhaul of federal agencies.

Trump Says US Has Struck Deal With NATO to Supply Weapons to Ukraine

President Donald Trump said on July 10 that he has struck a new deal with NATO under which the United States will supply weapons to Ukraine

RFK Jr. Bans Illegal Immigrants From Government-Funded Programs

HHS Sec. Robert F. Kennedy Jr. is rescinding a 1998 interpretation of a law that allowed illegal immigrants to access certain government-funded programs.

Rubio Set to Visit Malaysia for ASEAN Meetings Amid Tariff Tensions

A delegation including U.S. Sec. of State Marco Rubio will travel to Kuala Lumpur, Malaysia, for series of high-profile meetings between July 11 and 12.
spot_img

Related Articles