Hidden Forces
Will the U.S. Dollar Survive the Breakdown of the International System? | Paul Blustein
Apr 28, 2025
Paul Blustein, a seasoned financial journalist and economic historian, delves into the U.S. dollar's storied resilience amid global crises. He discusses how the dollar secured its status as the dominant currency and examines recent U.S. policy shifts and their international implications. The conversation touches on rising protectionism, dwindling investor confidence in U.S. leadership, and potential threats from cryptocurrencies, painting a picture of a precarious future for dollar hegemony in a changing economic landscape.
44:08
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Quick takeaways
- The U.S. dollar's transition from a decentralized currency to a global reserve currency was cemented by the establishment of the Federal Reserve in 1913.
- Future threats to dollar hegemony could arise from geopolitical changes and potential missteps in U.S. financial policy affecting global investor confidence.
Deep dives
The Evolution of the Dollar
The discussion elaborates on the transformation of the US dollar from a basic unit of account to the world’s dominant reserve currency. Initially, the dollar existed in a decentralized banking system, where different banks issued their own forms of currency, making it difficult to ascertain the true value of a dollar. The establishment of the Federal Reserve in 1913 marked a pivotal shift in how the dollar was perceived, centralizing and stabilizing its value. This institutionalization involved a complex network of laws and regulations that underpinned the dollar's credibility and usability in both domestic and international transactions.
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