The dollar’s prolonged swoon throughout much of 2009, coming at the end of a near ten-year slide, has sent currency analysts, financial officials, and politicians of all stripes into a hand-wringing melancholy regarding the greenback’s long-term prognosis. Of course, many ignore the fact that the world fled to the dollar during the financial crisis as a safe harbor from the stormy seas of financial and economic chaos.
Comment [11]
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The debate over the exchange rate between the renminbi (RMB) and the dollar is usually framed in terms of global imbalances: excessive US consumption beyond its savings on the one hand and excessive Chinese production and savings beyond its own spending on the other. This quickly leads to the view that the United States should export and save more and China import and spend more.
- Comment [6]
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The international currency of choice, the dollar, is under the control of a single country, a worrisome arrangement. Even worse, this country has been running huge external deficits for more than a decade and is now the world’s single largest debtor.
- Comment [2]
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In March 2009, Chinese central bank Governor Zhou Xiaochuan caused a brief stir in the currency markets by suggesting that a dollar-based international monetary system was inherently unsustainable. “Issuing countries of reserve currencies are constantly confronted with the dilemma between achieving their domestic monetary policy goals and meeting other countries’ demand for reserve currencies,” he wrote.
- Comment [7]
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On the threshold of the new decade, it seems fitting to take a long-term view. There are a plethora of issues that crystal-ball gazers could usefully contemplate.
- Comment [2]
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There is a ticking time bomb under the dollar. It could explode at any time.
- Comment [5]
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Exchange rate movements over the past year have had a substantial impact on the competitiveness of countries and of companies. Increased exchange rate volatility and uncertainty about future movements are also complicating company investment decisions.
- Comment [12]
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Since 1997 we’ve seen three global financial earthquakes, with the current one being the biggest and most violent. Unfortunately, there’s no reason to believe we’ve come to the end of the string.
- Comment [12]
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The outbreak of the global financial crisis was preceded by an extended period of persistent financial imbalances. These imbalances stemmed from the symbiotic relationship between the US, with its huge current account deficits, and China (as well as some other countries) that had equally persistent trade surpluses and which financed the US deficits with large capital inflows.
- Comment [6]
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Paradoxically, one can have greater confidence in the long-run prospects for a currency than in its short-run prospects. This is because the relationship between long-run fundamentals and long-run value is stronger than in the corresponding short-run case.
- Comment [6]
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Just as we continue to analyze the causes and consequences of the 1929 stock market crash, historians will be assessing and reassessing the global credit crisis that began in 2008 and the Great Recession that followed. As they do, my guess is that the behavior of financial institutions and the post-crisis banking reforms will prove to be far less significant than two far-reaching structural changes in the global economy.
- Comment [8]
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Exchange rates and international capital flows have played only a minor role in the saga of the global financial crisis so far. For the United States and the United Kingdom, the essence was an old-fashioned domestic financial crisis.
- Comment [2]
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The world is in the midst of a crisis and so is the US dollar. Having served as the world’s reserve currency for nearly 100 years, is its long-standing predominance now coming to an end? The dollar has been depreciating versus the euro and the yen for quite some time now, raising doubts about its stability.
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12 Apr 2010 · 09:55:40 AM GMT
There are many different scenerios if/when the Almighty Dollar falters. (WHY do we put all our eggs in one basket?!) Currency is always the basis for any new “ism” that raises its need to dominate a culture. I advocate a new kind...—Linda Burkhead
In response to The almighty dollar in 2025
06 Apr 2010 · 12:59:04 PM GMT
I agree with Patric. The weakness of the dollar and the US economy is not the fault of the businesses—rather it’s from our politicians. Here in California, most of our “leaders” don’t lead…they continually ...—Matthew Lau
In response to The almighty dollar in 2025
06 Apr 2010 · 12:35:03 PM GMT
I see it as a matter of logic. In America, we have a lot of extra costs/restrictions that other countries don’t, particularly China: environmental rules, social welfare, disability, medical leave, unemployment, business liability, unions, e...—Matthew Lau
In response to The ticking time bomb and the dollar
28 Mar 2010 · 08:41:49 PM GMT
A Better Definition of “Reserve Currency” In the MGI discussion paper’s investigation into the cost of capital advantage, there is an attempt to isolate the portion of this advantage attributed to the dollar’s reserve currency status. MGI’s metho...—Leonard Haidl
In response to Costs and benefits of issuing a reserve currency
22 Mar 2010 · 02:38:17 PM GMT
A Better Definition of “Reserve Currency” In the MGI discussion paper’s investigation into the cost of capital advantage, there is an attempt to isolate the portion of this advantage attributed to the dollar’s reserve currency status. MGI’s met...—Leonard Haidl
In response to The not-so-exorbitant privilege
18 Mar 2010 · 12:33:06 PM GMT
Good article—Devin