Genres: Politics & Current Events,Books

The Power of Currencies and Currencies of Power

$7.99

Product Summery

Today, a Great Power’s arsenal extends well beyond the military, embracing soft power and also currency power. The dollar dominates the global economy, used in settling trade and investment deals but also held in reserve in vast quantities by central banks in case of a payments crisis. This demand for dollars keeps US borrowing costs lower than they otherwise would be, reinforcing the country’s economic clout and helping to pay for the world’s strongest armed forces. 

This Adelphi sets out how the United States has regularly deployed the power of the dollar to put pressure on foes such as Iran, as well as allies including the United Kingdom and Germany. Contributors, including Robert Zoellick, the former head of the World Bank, and John Williamson, a leading expert on currencies, assess how long the US will be able to maintain this ‘exorbitant privilege’ in tandem with a rising China. Beijing, sensing that the global crisis might herald the end of the dollar’s supremacy, is eager to gain monetary power by carving out an international role for its own currency, the renminbi. The book examines the obstacles China must first overcome in its quest and the strategic consequences if it succeeds.

‘It has become fashionable again to predict the demise of the US dollar’s special global role and its replacement by the Chinese renminbi. Power of Currencies provides a timely look at the range of conditions a country must meet, beyond narrow economic criteria, before it can assume the complex responsibilities of issuing a reserve currency. An excellent read for practitioners as well as for those more generally interested.’
Jim O’Neill, former chairman of Goldman Sachs Asset Management, London

‘One of the most remarkable market-driven international financial developments in the last fifty-plus years has been the evolution of the US dollar as a reserve currency. The French and the Chinese complain about the United States’ ‘exorbitant privilege’, but foreign central bankers continue to buy US dollar securities. The essays in this splendid little volume, Power of Currencies, provide a useful guide for the evolution of reserve-currency arrangements.’
Robert Z. Aliber, Professor Emeritus of International Economics and Finance, Booth School of Business, University of Chicago