A country’s deepening debt can paradoxically strengthen its currency’s global dominance

Evidence

Suddenly, the dollar became king and queen again. The Nixon Shock had produced a magic trick for the ages: the country going deeper and deeper into the red was the country whose currency, the dollar, was becoming more and more hegemonic. It was the epitome of paradox. The tumult unleashed by Nixon gave the world’s capitalists a strong impetus to dollarise their profits. It was to become an unmissable pattern. To this day, whenever Wall Street tanks, the moneymen’s reaction is to buy more dollars to send to … Wall Street! — Yanis Varoufakis, Technofeudalism, 198

Categorization

• XREF: connects to: A deficit country’s currency can grow hegemonic precisely because of that deficit — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 197; US debt cannot realistically become unrollable while the dollar remains the global reserve currency — Mark Blyth, Austerity: The History of a Dangerous…, 54; The Spanish piece of eight dominated global currency until the nineteenth century. — Neil MacGregor, A History of the World in 100 Objects, 1224

Broader Connections

• A deficit country’s currency can grow hegemonic precisely because of that deficit #corroborates (0.97) — Yanis Varoufakis, Technofeudalism, 197
• US debt cannot realistically become unrollable while the dollar remains the global reserve currency #corroborates (0.80) — Mark Blyth, Austerity, 54
• The Spanish piece of eight dominated global currency until the nineteenth century. #exemplifies (0.72) — Neil MacGregor, A History of the World in 100 Objects, 1224