King Dollar: The Past and Future of the World's Dominant Currency

The book was a great read that was intended for the non-expert in finance. Only down side was that the book cover was slightly torn (see picture, upper right corner) when it was delivered.

King Dollar provides a timely history of the dollar and its dominance in global commerce. The book is well timed in that the exceptionalism of the dollar is being scrutinized in a manner similarly to the aftermath of the GFC and the ability for the dollar to sustain its role as the central reserve asset is being questioned on a daily basis. Paul Bluestein, an economic journalist makes the case for the dollar and gives the history of why the dollar cannot be easily replaced, he also highlights that criticisms of the dollar are not new but chronic. The book is quite similar to other works on how dominant reserve currency status is not easily replaced and also brings in a study of the sanctions regime that the US has embarked upon since the GFC that make the US's role one that despite its flaws has no viable substitute. I remain a skeptic of the ability of the US dollar to remain in its current status as though its past is its destiny, but this book is a reminder of why the current status quo will be hard to change.The book starts with how the US became the dominant currency and the history of global commerce. The author discusses Bretton Woods and the quasi-gold standard as well as how Nixon broke the standard under excessive deficit spending and an unwillingness to honor gold conversions. There is an echo of history today with the irresponsibility of deficit spending causing anxiety on the value of the dollar though this time we are in a fiat currency era. The author discusses how the dollar's status was resented by Europeans and France in particular during this period and how the Euro was eventually the continents response to trying to empower themselves. The author reminds the reader of the prophecies of the Euro's likely replacement of the dollar that never happened as the Euro structure is fundamentally flawed as not all countries are equal. The author discusses the growth of the renminbi and yen but highlights their fractional use as a reserve asset due to the lack of capital convertibility or depth of capital markets. The author also spends time on how the dollar and its weaponization though frustrating for some can be seen as a public good (this is increasingly a questionable observation).The author then moves on to digital currencies both central bank as well as privately constructed cryptocurrencies. Unsurprisingly the author is a major skeptic of these as sufficient to displace the dollar and highlights the lack of usability in the Bahamas and China of the pilot programs of their usage. He also discusses and dismisses crypto currencies as unable to coordinate global finance, which is very much a given. The author also highlights that most transactions are effectively done on electronic legers already so one shouldn't overemphasize the game changing nature of a digital currency as an innovation capable of displacing the dollar.The author ends with the responsibilities that come from being the issuer of a global reserve currency. This is the most significant concept that is not argued convincingly. The issuer of the currency inherits a heap of benefits and certainly has responsibilities attached. In this era, more than any other in the past their seems to be a disregard for the latter and a dismissal of the former, as such the stability of the dollar is more at risk than in the past. We still remain in a world for which it will be exceptionally difficult to displace the dollar, the author argues that well, but whatever the odds are, they cannot be zero and the motivation to change the status quo is the highest ever and the book has no context for that. As such as a history lesson and a book to bring people back down to reality on why the dollar's status is at is is, this is a good book. As to the belief that the dollar has little to worry about, the risks are greater today than ever, though they remain small in the near term.

I found the chapters around digital and other currency alternatives to the dollar to be the most interesting. The author resoundingly supports the position of the dollar as the preeminent currency but I did not feel that there was strong enough support in the book for this strong of a view. A lot of counter points are left under addressed.