The USD: If it is not broken, do not fix it.


Amidst talks by BRICS and associated nations that they will dump the dollar and issue a new currency as alternative global reserve currency, the market is responding.
There was no time the USA compelled all countries to grant the status of main reserve currency to the dollar but after the second world war, the US economy was the most organized big economy and the task of being global reserve currency fell on the US dollar. It could have been the Chinese yuan if China were properly organized with single digit inflation and a large government budget back then.
The USA has managed everything well with inflation never hitting the roof. There have been calm.
There is nothing to point to as gain for the USA as a result of the unspoken concession because many nations without such concessions are better off than the USA on a per capita basis.
Presently the dollars outside the USA is more than the one within the USA as the dollar has become a global currency. The same thing applies to all hard currencies to lesser degrees. The lower the inflation, the harder the currency and the more the confidence the market will have in the currency. The proposed BRICS central bank can not handle inflation better than the US federal reserve has been handling it. Latest US inflation figure is just two percent as at November 2024.
If there is a sudden and universal attack on the dollar, it will hurt the US economy and the US can respond by dumping the dollar and all dollar obligations as well.