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Is there any other country with both the court system and wealth required to back up being the global reserve currency? I don't think there is and I don't see a

Is there any other country with both the court system and wealth required to back up being the global reserve currency? I don't think there is and I don't see a viable contender showing up in the near future.

kccqzy 1y ago
I agree with you. I don't even think in the near future there will be a single global reserve currency. There will be multiple ones, all of which weaker in terms of power and influence than the dollar.
- Ekaros 1y ago
  Do you even need singular global currency in modern world? Where every transaction can be in essence instant if there was desire. And everything is digital. Overall it is rather different world and things can be done different than before.
  - water9 1y ago
    The United States won’t let their reserve currency go without a fight
  - bootsmann 1y ago
    The world doesn’t necessarily need it, but the US does need it to be the dollar due to the massive deficits it runs.
    - ofalkaed 1y ago
      The US dollar provides a massive stabilizing effect on the global economy, which we don't need but it is nice.
  - vkou 1y ago
    > Do you even need singular global currency in modern world? The world doesn't need it, but unless Americans want to see their purchasing power destroyed, they do.
  - ethbr1 1y ago
    > Do you even need singular global currency in modern world? Where every transaction can be in essence instant if there was desire. Pricing at international scale becomes a lot more complicated without a singular global reserve currency.
- ofalkaed 1y ago
  I suspect there will be at least two big ones on about the same level but I don't think this will be particularly near future, at least not near future in context of the global economy which is fairly young. It is the logical path for China with their role in the global economy and how much western business relies on them, but this will take decades, they have a lot of work ahead of them.
saubeidl 1y ago
The European Union.
- DaSHacka 1y ago
  Hah, and people say HNers don't have a sense of humor
treetalker 1y ago
As a counterpoint, confidence in US courts (particularly the federal courts) is rapidly declining — both among the public and among those who operate within the court systems.
- ofalkaed 1y ago
  This is about how the courts operate with regards to international business disputes, US has proven record about being impartial in these matters.
  - ioasuncvinvaer 1y ago
    Even if that is true, the US's proven record does not include the current administration.
    - ofalkaed 1y ago
      It excludes the current administration, the separation of powers goes a long ways here to help insure things are not overly influenced by internal politics. Worst case is you stall until things change, which is not much of an issue when dealing with the amounts of money that matter in these cases.
      - redserk 1y ago
        I don't think our system of separation of powers was designed with the modern political party system we currently have in mind.
- schrodinger 1y ago
  That’s true, but doesn’t necessarily contradict the question posed. Is any other country _better_ in both of those dimensions?
- A_D_E_P_T 1y ago
  As somebody who has been involved in civil actions in Federal Court, I can assure you that it deserves zero confidence and is basically pay-to-win. (Unless two billion-dollar-plus corporations are involved.) This is largely, but not only, on account of discovery taking years and costing unbounded sums of money, plus monetary penalties for not complying with expensive discovery.
earnestinger 1y ago
Why court system is relevant for the currency? I assume British courts can enforce contracts that deal in dollars.
- simonh 1y ago
  The court system is relevant for confidence in investing in an economy, and currencies are largely supported by and dependent on investment into the economy of the country. Even government debt instruments are a form of investment in the economy of the country.
ivell 1y ago
It need not be a single country. Organizations like BRICS could float it's own currency, and with significant size of the economy of the members, it could pull it off. This is why Trump has been explicitly warning against that.
- AnimalMuppet 1y ago
  "... with both the court system and..." BRICS might have the wealth. Would you trust that it's going to be legally stable? I wouldn't. But, in fairness, for the first time in my life I don't trust the US in that way either. I'm beginning to see it as possible that someday the president could make some arbitrary decision that takes everything I have. (Either this president or another - but it's this president who's making the precedents that make it possible.)
- crossroadsguy 1y ago
  BRICS word includes India and China. So good luck with that :)
vasco 1y ago
Currency is backed by military, not courts. Courts are also backed by military.
- crossroadsguy 1y ago
  Exactly. I can’t believe there are people on HN who believe the dollar becoming de facto currency had anything to do with USA’s savoury virtues, judicial or otherwise It didn’t “become”, it was forced.
- yladiz 1y ago
  That’s not really true, or at best reductive. The Eurozone does not have a military yet has a very valuable and relatively stable currency. Yes, various counties in the zone do have strong militaries, but it’s not the same as the body backing the currency having one.
Havoc 1y ago
There is no viable alternative But that doesn’t mean confidence in the dollar can’t die anyway before an alternative is found. Straight up chaos and collapse is a hopefully remote but real possibility. Remember how the 2008 crisis was stopped? Strong messages from reserve banks that they’ll backstop and people believing them. That trick doesn’t work in the world author it’s describing.

kccqzy 1y ago

I agree with you. I don't even think in the near future there will be a single global reserve currency. There will be multiple ones, all of which weaker in terms of power and influence than the dollar.

Ekaros 1y ago
Do you even need singular global currency in modern world? Where every transaction can be in essence instant if there was desire. And everything is digital. Overall it is rather different world and things can be done different than before.
- water9 1y ago
  The United States won’t let their reserve currency go without a fight
- bootsmann 1y ago
  The world doesn’t necessarily need it, but the US does need it to be the dollar due to the massive deficits it runs.
  - ofalkaed 1y ago
    The US dollar provides a massive stabilizing effect on the global economy, which we don't need but it is nice.
- vkou 1y ago
  > Do you even need singular global currency in modern world? The world doesn't need it, but unless Americans want to see their purchasing power destroyed, they do.
- ethbr1 1y ago
  > Do you even need singular global currency in modern world? Where every transaction can be in essence instant if there was desire. Pricing at international scale becomes a lot more complicated without a singular global reserve currency.
ofalkaed 1y ago
I suspect there will be at least two big ones on about the same level but I don't think this will be particularly near future, at least not near future in context of the global economy which is fairly young. It is the logical path for China with their role in the global economy and how much western business relies on them, but this will take decades, they have a lot of work ahead of them.

saubeidl 1y ago

The European Union.

DaSHacka 1y ago
Hah, and people say HNers don't have a sense of humor

treetalker 1y ago

As a counterpoint, confidence in US courts (particularly the federal courts) is rapidly declining — both among the public and among those who operate within the court systems.

ofalkaed 1y ago
This is about how the courts operate with regards to international business disputes, US has proven record about being impartial in these matters.
- ioasuncvinvaer 1y ago
  Even if that is true, the US's proven record does not include the current administration.
  - ofalkaed 1y ago
    It excludes the current administration, the separation of powers goes a long ways here to help insure things are not overly influenced by internal politics. Worst case is you stall until things change, which is not much of an issue when dealing with the amounts of money that matter in these cases.
    - redserk 1y ago
      I don't think our system of separation of powers was designed with the modern political party system we currently have in mind.
schrodinger 1y ago
That’s true, but doesn’t necessarily contradict the question posed. Is any other country _better_ in both of those dimensions?
A_D_E_P_T 1y ago
As somebody who has been involved in civil actions in Federal Court, I can assure you that it deserves zero confidence and is basically pay-to-win. (Unless two billion-dollar-plus corporations are involved.) This is largely, but not only, on account of discovery taking years and costing unbounded sums of money, plus monetary penalties for not complying with expensive discovery.

earnestinger 1y ago

Why court system is relevant for the currency? I assume British courts can enforce contracts that deal in dollars.

simonh 1y ago
The court system is relevant for confidence in investing in an economy, and currencies are largely supported by and dependent on investment into the economy of the country. Even government debt instruments are a form of investment in the economy of the country.

ivell 1y ago

It need not be a single country. Organizations like BRICS could float it's own currency, and with significant size of the economy of the members, it could pull it off. This is why Trump has been explicitly warning against that.

AnimalMuppet 1y ago
"... with both the court system and..." BRICS might have the wealth. Would you trust that it's going to be legally stable? I wouldn't. But, in fairness, for the first time in my life I don't trust the US in that way either. I'm beginning to see it as possible that someday the president could make some arbitrary decision that takes everything I have. (Either this president or another - but it's this president who's making the precedents that make it possible.)
crossroadsguy 1y ago
BRICS word includes India and China. So good luck with that :)

vasco 1y ago

Currency is backed by military, not courts. Courts are also backed by military.

crossroadsguy 1y ago
Exactly. I can’t believe there are people on HN who believe the dollar becoming de facto currency had anything to do with USA’s savoury virtues, judicial or otherwise It didn’t “become”, it was forced.
yladiz 1y ago
That’s not really true, or at best reductive. The Eurozone does not have a military yet has a very valuable and relatively stable currency. Yes, various counties in the zone do have strong militaries, but it’s not the same as the body backing the currency having one.

Havoc 1y ago

There is no viable alternative But that doesn’t mean confidence in the dollar can’t die anyway before an alternative is found. Straight up chaos and collapse is a hopefully remote but real possibility. Remember how the 2008 crisis was stopped? Strong messages from reserve banks that they’ll backstop and people believing them. That trick doesn’t work in the world author it’s describing.