James Pethokoukis

Politics and policy from inside Washington

Is dollar supremacy a false economic god?

October 6, 2009

Lots of folks are in a tizzy about this report of an Arab-Russian-French-Chinese plot (sounds like a typical episode of 24) to stop using the dollar in oil trading. Add to this a) the already declining dollar, b) the rise in gold and c) the recent speech by Robert Zoellick where he warned about dollar threats and you have d) visions of a dollar apocalypse and the end of America as we know it.

But so what. The goal of American economic policy should be to produce an economy that is a)  innovative and productive economy, b)  where standards of living are rising, c) where is inflation is low and d) supports a fiscally sound government. Do that, I would think, and your currency will take care of itself, yes? And when you add to that the reality that dollar supremacy has enabled Uncle Sam to run massive budget deficits, a more multipolar currency world doesn’t sound half bad.

Comments

Wow, you’re finally saying something that I can fully agree with. I’m a little scared… I bet I’ll feel back to normal once I read your next entry though.

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