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All the things you mention could be used to decide make no sense at all because you discounted "political and military factors", which are almost all that matte
by vasco 1y ago
All the things you mention could be used to decide make no sense at all because you discounted "political and military factors", which are almost all that matters in choosing a reserve currency.
It's like asking which is the best CPU when you discount speed, price and energy consumption.
- satyrun 1y agoIt is really even more than that because of the depth of the US bond market. Nation states need to be able to make huge transactions without any one else holding the currency feeling it. That is what makes the reserve currency the reserve currency. That can't be done without a massively liquid bond market and no one else is even close to the US. Then the network of military bases and military power is just another layer on top of the US bond market. Then on top of that the top competitor has capital controls.
- lmpdev 1y agoI disagree There is signal under the noise of political and military factors Political and military factors right now are the primary concerns But in peace time, or with a long enough view (centuries and millennia) the question of what makes a good reserve currency is a question worth addressing
- vasco 1y agoIn peace time politics and military are exactly as important as during war, because the threat of war never goes away. This has been true as long as we've had currency, which is inextricably linked to military power. You need the power of the state behind the currency for it to have any value and for people to use it as currency, as well as to prevent forgery.