The US dollar is already a loaded weapon. What next?

The apparent decay in the institutions that underpin the power and credibility of the dollar – and its issuer – are the focus of a recent book.

The Australian dollar is down 14 per cent against the greenback, compared to just 1.3 per cent against other major trading partners. iStock

Carey K Mott

Nov 20, 2024 – 5.00am

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Over the past 80 years, the US dollar has become the lingua franca of the global financial system. From Europe to Australia, central banks, companies, manufacturers, and tourists find common language by using the American currency. Today, an estimated $US6.6 trillion in daily global transactions involve the dollar.

The centrality of the US dollar to the global financial system has not only symbolised the growing influence of Washington abroad but has also raised the platform of the US treasury secretary. A job that the first federal Congress outlined, in 1789, as a glorified bookkeeper, has since evolved into that of a financial diplomat – managing crises, negotiating trade policy, vetting foreign investment, restructuring debt, levying sanctions and more.

Foreign Policy