The Almighty Dollar: How Global Finance Submits to America's Exorbitant Privilege

The US dollar's dominance in global finance is a remarkable phenomenon that has been perpetuated for over eight decades. With more than $57 billion in circulation, the dollar is not only the most widely held currency but also serves as a global reserve currency. In fact, foreign central banks and governments hold over half of their reserves in dollars, totaling around $7 trillion.

According to Kenneth Rogoff, a Harvard economist, the ease of selling US Treasury debt quickly and without excessive transaction costs is a key factor in its popularity. This liquidity makes it an attractive option for investors seeking to park their money temporarily or liquidate assets rapidly.

The stability provided by the dollar's governing structure and the rule of law in the United States also contribute to its appeal. Even under President Trump, who has attempted to undermine the Federal Reserve's independence, the dollar has maintained its global primacy.