Can the U.S. Dollar Endure as the Dominant Reserve Currency?

Since the global financial crisis of 2007-8, the future role of the US dollar as a major reserve currency has been occasionally challenged by researchers and the media. Government bonds of the US Government soared sharply (103% of the annual GDP of 2012), its credit rating was downgraded in 2011. According to macroeconomic theory, FRB's massive quantitative easing policy has actually increased the money supply since 2008, which will lead to depreciation of the exchange rate against other currencies.

Historically, the role of the dollar in the world's reserve currency has backed the dominant position of the United States. The depreciation of the US dollar as the world's reserve currency is one of the most obvious signs of the decline in the global economic situation in the United States, equivalent to the annihilation of the British pound as the world's currency, and in the post world the Second World I will help the Taishi Empire to end the great war. In other words, in the current currency system, the US can pay the price of goods and services in printed dollars. If other countries print large amounts to buy imported products, their monetary value will collapse in the foreign exchange market. As the dollar's reserve currency position has created infinite demand for the dollar, the United States strengthens its military strength and supports the press to purchase foreign goods.

It is unlikely that the dollar will stay in major foreign currency reserve currencies over a long period of time and switching to another reserve currency could potentially seriously disrupt the global economic system. The imminent crisis in the economy may be an opportunity for fundamental redesign of our currency and the economic system, not from one dominant reserve currency to another. Many analysts predict that the dollar will lose this condition in the next few years (more info)