TURBAT:
In 1944, the US dollar was declared as the international money exchange currency and the medium of exchange in international markets by 44 allied countries. Since then, it has been the de facto global currency and has dominated the world. Prior to this, gold was used as the foreign reserve exchange.
Today, almost 61% currencies in the world are dominated by US dollars and nearly 40% of world debt is in US dollar. What is most surprising, however, is the fact that the US now has the capability to print its way out of an economic crisis. But there is a catch, of course. In order for this to be possible, the new printed money needs to be utilised through debt. That is, the government issues new debt and the Federal Reserve prints money and buys it; and because the dollar reigns supreme, they can do this forever.
In this game of dollar, the US will always be the greatest power in the world. But the recent rise in cryptocurrency may just shift the tide in the coming future.
Published in The Express Tribune, April 26th, 2021.
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