Ryan McMaken discusses his recent articles for the Mises Institute about the future of U.S. dollar hegemony. He walks us through the dollar’s history as global reserve currency, which began in the mid 20th century as an alternative to a direct gold standard. Still, the dollar was redeemable for gold in theory, until Nixon suspended the policy altogether and unchained debt and inflation to bring about the system we have today. McMaken describes the importance of keeping the dollar as the default currency for oil transactions, creating demand for not only the currency itself, but for dollar-denominated securities that can be purchased back with those dollars by oil producers like Saudi Arabia. He conjectures that a key factor in America’s aggressive foreign policy is to make sure the Middle East continues to agree to this system.
Discussed on the show:
- “Huge Debt Got Us Hooked on Petrodollars — and on Saudi Arabia” (Mises Wire)
- “The World Looks to Abandon the Dollar as US Sanctions Tighten Their Grip” (Mises Wire)
Ryan McMaken is a senior editor at the Mises Institute. He has degrees in economics and political science from the University of Colorado, and was the economist for the Colorado Division of Housing from 2009 to 2014. He is the author of Commie Cowboys: The Bourgeoisie and the Nation-State in the Western Genre.
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