An exorbitant privilege or a curse? Each phrases have been used to explain the U.S. greenback’s distinctive standing because the world’s major reserve foreign money. It’s the primary medium of trade for world commerce and finance, and the premier retailer of worth for monetary establishments and companies all over the world, in addition to for people overseas preferring bucks to their very own less-stable currencies.
Valéry Giscard d’Estaing, France’s finance minister from 1969 to 1974 earlier than changing into his nation’s president, charged that the greenback’s central position let the U.S. run sustained balance-of-payments deficits with out a penalty, whereas different deficit-carrying international locations can be pressured to tighten financial and financial insurance policies or undergo a weaker foreign money. However, as John Connally, Treasury secretary within the Nixon administration, famously asserted to his international counterparts: “The greenback is our foreign money, however it’s your downside.”