An exorbitant privilege. That is what French President Valéry Giscard d’Estaing called the U.S. dollar’s role as the global international reserve currency. That role brings many advantages but is it sustainable and worth any costs? What would it take for an alternative to emerge? The raising of the debt ceiling, the rise of China as a financial power and recent troubled economic times in the United States have many questioning the future of the U.S. dollar. A BETTER PEACE welcomes Rob Farley and Mark Duckenfield to discuss the realities of the power and place of the U.S. economy in the international market. They join podcast host Ron Granieri for a conversation about world finance. Their goal is to explain why debt is actually necessary, why the Chinese renminbi won’t likely become the new reserve currency and how much gold could fit in Bliss Hall here at the War College.
The U.S. dollar is one of the currencies and the primary currency that other countries hold, essentially as a hedge with respect to their own obligations, concerns about the international economy, and to maintain their own currencies. And so they will hold a portfolio of different currencies, kind of like they used to hold gold, and one of these, or the biggest one of those currencies, is the American dollar.
Podcast: Download
Subscribe: Android | Email | RSS
Rob Farley is a Senior Lecturer at the University of Kentucky and has been a Visiting Professor at the U.S. Army War College. He is the author of Grounded: The Case for Abolishing the United States Air Force and The Battleship Book and co-author of Patents for Power: Intellectual Property Law and the Diffusion of Military Technology and the new book Waging War with Gold: National Security and the Finance Domain Across the Ages.
Mark Duckenfield is Professor of International Economics in the Department of National Security and Strategy (DNSS) and at the Strategic Studies Institute and the former Chair of DNSS at the U.S. Army War College. He holds an MA and a PhD in Political Science from Harvard University where he specialized in European political economy. He has written numerous academic articles on gold, financial crises and international political economy and is the author of the book Business and the Euro.
Ron Granieri is Professor of History at the U.S. Army War College and the Editor of A BETTER PEACE.
The views expressed in this presentation are those of the speakers and do not necessarily reflect those of the U.S. Army War College, U.S. Army, or Department of Defense.
Photo Description: Trading Floor at the New York Stock Exchange during the Zendesk IPO
Photo Credit: Scott Beale / Laughing Squid via flickr