4 ms·
More to the point, what about the "exorbitant privilege" the USA enjoys from having the worlds reserve currency? If other nations make a concerted effort to dit
by gwicks56 8y ago
More to the point, what about the "exorbitant privilege" the USA enjoys from having the worlds reserve currency?
If other nations make a concerted effort to ditch this set up, the USA can no longer run massive deficits. Imagine the USA trying to run a balanced budget immediately.
- mc32 8y agoThat's over-stated. I don; think the US cares too much about that at all. In fact it encouraged the Euro.
- gonvaled 8y agoThat happened in the golden era of multilateralism, after the fall of the Berlin Wall and the Soviet Union. The US realized how unfair the situation was, and took some timid steps to start a rebalancing of the situation, allowing for the creation of a competing currency. It is not that the Euro was not a threat to the dollar, it is simply that the threat was minor then, and that it was plain and simple the right thing to do: renounce to unfair advantages in order to move to a more just world. The US continues to unfairly abuse the dollar as world currency, and dismissing this fact can be a costly misjudgment: fair for the world, but painful for the US.