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Why does this really matter so much? I think what matters more is national wealth, wealth per capita, and their growth rates. This is an interesting list: http

• chomp 1y ago
  As it turns out, when every country holds US dollars for use in global finance, it makes it very easy for them to park US dollars in American financial assets
  • kjkjadksj 1y ago
    Where else would they park it? The stock market is being automatically pumped by 401k auto purchases and similar investment strategies that amount to basically a tax with lipstick to subsidize the market. I don’t think any other nation is pumping their own assets to this scale. Maybe china but they don’t exactly let in outsiders to milk a good cash cow I wouldn’t think.
  • mattmaroon 1y ago
    Also, the primacy of the American banking system allows the US to use it as a cudgel against foreign countries to make them do do all sorts of things. If some other currency is the global reserve, we lose a fair bit of soft power. There are a lot of reasons we like being in the position we’re in, and I don’t think we know how bad losing it will be, if we do, but I think it’s unlikely to be positive. (Clearly our economists have largely agreed or we’d have gotten here sooner.)
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• aforty 1y ago
  It matters because it’s the main reason why the US is able to borrow money so cheaply and why the US doesn’t get a junk bond rating.
  • etaioinshrdlu 1y ago
    I thought the reason we are able to borrow cheaply, and ratings, is basically due to credit-worthiness, and not dollar as a reserve dominance. After all, during the debt ceiling crises, that's when our credit worthiness and ratings were downgraded, but it had nothing to do with the actual currency.
    • dathery 1y ago
      Knowing you will get paid back (i.e. credit worthiness) is part of it, but another part is that the currency holds its value, and the global demand for dollars is an important part of that. If the global demand for dollars decreases, then borrowing is more expensive because you need to offer a higher interest rate to entice people to purchase bonds, because they have other more attractive options to store/grow their money than US bonds. One way to think of it is that the US benefits from the current world order by essentially taxing the rest of the world to pay for its spending by devaluing their currencies relative to the dollar.
    • selectodude 1y ago
      At the end of the day, somebody out there has to have a US Dollar and feel comfortable lending it to the US Government. The reserve currency status of the dollar means more people need it, which means there’s more supply of dollars to borrow without causing currency collapse.
    • bgnn 1y ago
      Yes and no. US can just print more dollars and pay its debt, which it is doing since Nixon. It doesn't need to default on its debt ever, as long as USD is the reserve currency. Of course the rate rhis happens is a delicate thing. Too quick devaluation would upset the debtors. Though they own so much of US debt (like China owns 2 trillion dollars or sth) that they are incentivizes to play along.
      • XorNot 1y ago
        Most US debt is still owned by the US though: 79% is owed to domestic holders[1] [1] https://www.pgpf.org/article/the-federal-government-has-borrowed-trillions-but-who-owns-all-that-debt/ https://www.pgpf.org/article/the-federal-government-has-borr...
• dgfitz 1y ago
  It doesn’t matter, it’s just a clickbait headline.
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• londons_explore 1y ago
  The controller of dollars gets to mint new dollars, making existing dollars less valuable. Other countries who use dollars do not have that privilege. That is effectively a 2% annual tax on the entire world, paid to the controller of the dollar.
  • suzzer99 1y ago
    And we're going to blow it all up for no reason.
    • mattmaroon 1y ago
      The people who are blowing it up are doing it for a reason. You can disagree with them (I largely do) but there will likely be some upsides. I don’t know if they’ll be worth it, but all the economists said the trade war with China was a bad idea in Trump’s first term but has come around to it by the time Biden got into office. I wouldn’t say I’m optimistic but it’s possible it may work.
      • suzzer99 1y ago
        I think we have a madman at the helm leading sycophants who won't challenge him.
        • mattmaroon 1y ago
          Is it not possible that the madman is actually hiring people who think these things and he agrees with them? You give the mad man more credit than I do if you think he’s the idea guy.
  • HDThoreaun 1y ago
    Literally nobody is holding dollars in cash. Everybody holds them via bonds which return more than inflation.
• justin66 1y ago
  > wealth per capita It matters a lot to those of us among the capita who hold our wealth in US dollars.