Milton Ezrati
The dollar cannot lose its status as a global reserve currency unless another currency gains global usage. Fears of the US dollar’s fall from international dominance arise with some frequency these days. Sometimes they emerge out of exaggerated notions of Chinese economic and financial power. Sometimes they reflect concerns about the hollowing out of America’s economy and the nation’s chronic trade deficits. Most recently, dollar fears have sprung from otherwise legitimate concerns about the increasing burden of public debt.
These matters are not unrelated, but the dollar’s role as the primary vehicle of international exchange and store of wealth, what bankers and economists refer to as the “global reserve,” is more complex than such easy links imply. Should the dollar lose its global status, it would occur more slowly than these fears suggest, and if it does, it will not happen for some time. The world simply has no alternative.
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