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IPFS News Link • Economy - Economics USA

If America Loses Its Reserve Currency Status, You'll Still Be Okay

• https://libertarianinstitute.org, by Ryan McMaken

Kudlow laments that a toppling of the dollar from that perch "seems to be the direction we're going in."

Kudlow's remarks came a day after Donald Trump declared that China is trying to displace the U.S. Dollar [sic] as the NUMBER ONE CURRENCY" and that if this occurs, it would be the biggest defeat for our Country [sic] in its history."

Neither Trump nor Kudlow actually explain why maintaining reserve currency status is so important. After all, it's clear that it is not necessary for a country's currency to be a reserve currency in order for that country to have a high standard of living and a high degree of economic freedom. We could simply look to Norway and Switzerland to see that.

What's Good for the Government Isn't Necessarily What's Good for the People
Trump and Kudlow seemingly can't tell the difference between what is good for the U.S. government, and what is good for the people. The idea that global reserve currency status for the dollar is essential to "America" relies on the false notion that the interests of the U.S. regime and the interests of ordinary taxpaying Americans are one and the same. These interests rarely coincide, however, and they certainly don't when it comes to reserve currency status. This is especially the case when the dollar is unbacked by any commodity like gold, and is simply a floating fiat currency that can be inflated at the will of the regime at any time.

That global reserve currency status benefits the regime itself is obvious. This status for the dollar does indeed allow the regime to more recklessly inflate the dollar and increase deficits, thus enhancing the U.S. regime's ability to bribe voters with enormous welfare programs and involve the U.S. regime in a dazzling array of wars that have nothing to do with defending US territory. None of this, however, enhances the standard of living of Americans who pay the bills.


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