A Shot Heard Around the World

In the summer of 1914, as the assassination of Archduke Franz Ferdinand in Sarajevo ushered in the First World War, the U.S. dollar was quoted and convertible in far fewer international markets than was the contemporary Austro-Hungarian krone. The moral: huge global events can mean swift and sudden change to the financial order.

The coronavirus crisis should still wreak far less human damage than the Great War, which precipitated the fall of the Austro-Hungarian Empire, but the shock to the global system may be comparably great. According to Michael Howell of London's CrossBorder Capital Ltd., this is reason to prepare ourselves for another change of global financial leadership. After a century in which the financial world orbited around the dollar, he believes that we are at the beginning of the Chinese century. 

If this sounds outlandish, remember that almost everyone suddenly seems to agree life after the coronavirus will be different. This crisis will change us. The disagreement is over exactly what it will change us into.

When it comes to which nation will benefit the most, two camps are emerging. The first holds that the U.S. is already using its immense fiscal and monetary firepower and this will ensure it comes out on top, just as after the last great crisis.