AI Snips
Chapters
Transcript
Episode notes
What Is A Global Reserve Currency
- A global reserve currency is widely held by central banks worldwide as foreign exchange reserves.
- It serves as the primary medium for international trade, reserves, and currency stabilization.
Triffin Dilemma Explained
- The Triffin dilemma highlights a paradox for a national currency being the world reserve.
- To supply global demand, a country must run deficits, risking confidence and currency stability.
Reserve Currency Drives Trade Deficits
- Having the global reserve currency almost guarantees a trade deficit.
- Reserve currency means currency value rises, making exports more expensive and less competitive.