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Important to note this is the PPP GDP, not the nominal one. When talking about macro concepts like currency dominance, nominal GDP is more useful (in which the
by Jaxkr 6y ago
Important to note this is the PPP GDP, not the nominal one. When talking about macro concepts like currency dominance, nominal GDP is more useful (in which the US still maintains a lead).
- jimmydef 6y agoBoth the nominal and PPP GDPs of the US as a percentage of the world GDP have been dropping steadily over the past few decades. It used to be near 40% of the world's GDP. Now it's barely 20%. At what percentage point will the world look at the US Dollar and its economy and decide maybe that figure is too low for the dollar to be world reserve currency? 15%? 10% or 5%? And did weaponizing the dollar as a geopolitical stick against its enemies change that threshold? Or does it even matter as long as the US retains military primacy on our planet? These things are more guesswork and storytelling than anything.
- throwaway210222 6y agoThis. At some point the world economy is so much bigger than the USA's (even if no one stuffs up), the the US government simply CANNOT product enough dollars* for the demand. Exactly the same reason why the Swiss franc can never be the global reserve currency. * Although the current USG is certainly giving it a good go ;).
- hntrader 6y agoThe supply of USD should be mostly irrelevant. If supply is constrained then the FX rate just adjusts. The parent's point (about US' share of world GDP) is quite different to the one you're making here.
- naveen99 6y agoBut us wealth is still around 30% of global total for only 5% of the population. How long does it stay this way ? Until usa stays the safest destination for talent and capital. Maybe hard after AI enables real time translation of language at some point.