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I don't know much about montary theory but from what I do know it seems unlikely that in my lifetime the US dollar will be threatened as the world's reserve cur

I don't know much about montary theory but from what I do know it seems unlikely that in my lifetime the US dollar will be threatened as the world's reserve currency. I can only think of the euro, yen, renminbi, rupee and perhaps the pound as currencies that are backed by strong enough political forces to be considered as reserve. But there are many threats which each of these routes, do you trust the Chinese central bank? Is India stable enough? Is the EU stable enough? They are losing a prominent member in March 2019, will the UK recover post-brexit for the pound to be attractive?? Even then, as stated other nations have deep ties with the US which increases the risk of moving from the dollar. We provide for Japan's defense, we are the biggest funder of NATO, etc. While Trump has moved the US away from international institutions during his term I have no doubt that the US will continue to dictate global economic policy after his term is complete. In many ways, while it's fun to speculate, I don't see the rest of the world having the will or options to move away from the dollar as a reserve currency.

datavirtue 8y ago
The new currency can't be owned by anyone and it certainly can't be subject to a payment tax (conversion or transfer fees).
kalleboo 8y ago
Yeah the only existing currencies I could see taking over are the euro or yuan, but Europe is too politically diverse and China is too politically hostile. The only existing "currency" I could see is some kind of opening up and expansion of the SDR[1] (China has pushed for this as an alternative way to replace the USD as a reserve currency) [1] https://en.wikipedia.org/wiki/Special_drawing_rights https://en.wikipedia.org/wiki/Special_drawing_rights
- XorNot 8y ago
  Europe's political diversity is a benefit here though - the EU Council as a governing body, provided it got to the point where it promised not to change anything, would easily look like a stable administrator. Business is more then happy to ignore all sorts of legal inconsistency if the trade off is predictable year over year behavior.
redisman 8y ago
Just trying to imagine what would be the equivalent to a Brexit in the US shows how much more stable it is. Can you imagine if Texas was actually Amerexiting (Texsiting?) the Union next year? lol China's black box central banking is a complete sham.
- kazen44 8y ago
  Brexit has little to do with the EU's stability, and more with the stability of the UK political system. Let's not forget that the EU is not a nation-state on the same level as the US, but a supranational type of goverment. (and currently being the only one at that). Brexit is a lot easier to achieve politically compared to texas seceding because the US is an inherently far "stricter" type of political entity.
  - kbutler 8y ago
    > the EU is not a nation-state on the same level as the US That's the point. The reality of brexit suggests neither the Euro nor the GB-Pound is a stable substitute for the dollar as a reserve currency. The Yuan (with China's exchange rate manipulation and general economic manipulation)? The Yen (with Japan's 10-20 year malaise)? Crypto? (how much volatility and market manipulation are you willing to accept?) Gold/silver standard? (It has certainly had a tiny fraction of the inflation of the US dollar, but there are other challenges)
  - emodendroket 8y ago
    The United States is not a nation-state, in the sense that there is no "American people" who make up its polity (well there are Amerindians but it's obviously not their nation-state).
- emodendroket 8y ago
  We fought a war to settle that there is no right of voluntary secession for states.
fireflash38 8y ago
You're questioning if other currencies are up to the US's level. I don't see that happening quickly (or at all really with how the competition is going & their own internal problems). What's far more likely is the US's status dropping to other's level. If the US continues in the track that it's been on with the Gov't shutdowns and antagonistic policies towards other nations, people are going to want to rely less and less on the US. We've got a lot of inertia, but that can be overcome.

datavirtue 8y ago

The new currency can't be owned by anyone and it certainly can't be subject to a payment tax (conversion or transfer fees).

kalleboo 8y ago

Yeah the only existing currencies I could see taking over are the euro or yuan, but Europe is too politically diverse and China is too politically hostile. The only existing "currency" I could see is some kind of opening up and expansion of the SDR[1] (China has pushed for this as an alternative way to replace the USD as a reserve currency) [1] https://en.wikipedia.org/wiki/Special_drawing_rights https://en.wikipedia.org/wiki/Special_drawing_rights

XorNot 8y ago
Europe's political diversity is a benefit here though - the EU Council as a governing body, provided it got to the point where it promised not to change anything, would easily look like a stable administrator. Business is more then happy to ignore all sorts of legal inconsistency if the trade off is predictable year over year behavior.

redisman 8y ago

Just trying to imagine what would be the equivalent to a Brexit in the US shows how much more stable it is. Can you imagine if Texas was actually Amerexiting (Texsiting?) the Union next year? lol China's black box central banking is a complete sham.

kazen44 8y ago
Brexit has little to do with the EU's stability, and more with the stability of the UK political system. Let's not forget that the EU is not a nation-state on the same level as the US, but a supranational type of goverment. (and currently being the only one at that). Brexit is a lot easier to achieve politically compared to texas seceding because the US is an inherently far "stricter" type of political entity.
- kbutler 8y ago
  > the EU is not a nation-state on the same level as the US That's the point. The reality of brexit suggests neither the Euro nor the GB-Pound is a stable substitute for the dollar as a reserve currency. The Yuan (with China's exchange rate manipulation and general economic manipulation)? The Yen (with Japan's 10-20 year malaise)? Crypto? (how much volatility and market manipulation are you willing to accept?) Gold/silver standard? (It has certainly had a tiny fraction of the inflation of the US dollar, but there are other challenges)
- emodendroket 8y ago
  The United States is not a nation-state, in the sense that there is no "American people" who make up its polity (well there are Amerindians but it's obviously not their nation-state).
emodendroket 8y ago
We fought a war to settle that there is no right of voluntary secession for states.

fireflash38 8y ago

You're questioning if other currencies are up to the US's level. I don't see that happening quickly (or at all really with how the competition is going & their own internal problems). What's far more likely is the US's status dropping to other's level. If the US continues in the track that it's been on with the Gov't shutdowns and antagonistic policies towards other nations, people are going to want to rely less and less on the US. We've got a lot of inertia, but that can be overcome.