Macro Musings with David Beckworth Paul Blustein on the Rise, Dominance, and Current Challenges to King Dollar
Apr 14, 2025
Paul Blustein, a former journalist at The Washington Post and Wall Street Journal, shares insights from his book on the dollar's journey. He examines the historical rise of King Dollar, highlighting pivotal moments like the Nixon Shock and the influence of Paul Volcker. Blustein also discusses the dollar's strategic role in statecraft and challenges posed by emerging currencies like the euro and crypto. He delves into the complexities of dollar dominance, the impact of financial sanctions, and the evolving landscape of global economic power.
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Book Helped Beckworth's Career
- David Beckworth credits Paul Blustein's book "The Chastening" for helping him get into the U.S. Treasury.
- The book broadened his understanding of international economics beyond applied math and theory.
Dollar's Rise and Nixon Shock
- The dollar rose to dominance post-World War II with Bretton Woods but had no dominance in America's first 150 years.
- Nixon's 1971 gold exit removed the dollar's gold backing but strengthened its role as a fiat currency.
Saudi Agency's Primitive Treasury Role
- David Mulford told of Saudi Arabia's primitive Monetary Agency in the 1970s managing huge oil revenues.
- Despite the primitiveness, they had to invest mostly in the liquid U.S. Treasury market due to its size and safety.
