A deficit country’s currency can grow hegemonic precisely because of that deficit

Evidence

The United States was, therefore, the only country in the world whose currency was in demand even by people who did not want to buy anything from it. That’s why, as a dark cloud of uncertainty descended upon Europe’s and Japan’s economic future, the world of finance responded by clamouring to turn their savings into dollars. … 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, 197

Categorization

• XREF: Connects to the broader platform-rent thesis and to post-Bretton Woods monetary history discussed in other sources on financialization. — connects to: Foreign-backed monetary systems subordinate a state to that foreign country. — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 369; Currency arrangements can function as wealth-transfer mechanisms between societies.; Legal monetary sovereignty rarely yields true economic currency sovereignty (+3 more)
• corroborated: 2 independent passages support this claim — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 197

Broader Connections

• Foreign-backed monetary systems subordinate a state to that foreign country. #expands (1.00) — Fanny Pigeaud_ Ndongo Samba Sylla, Africa’s Last Colonial Currency, 369
• Currency arrangements can function as wealth-transfer mechanisms between societies. #expands (1.00)
• Legal monetary sovereignty rarely yields true economic currency sovereignty #expands (1.00)
• The Nixon Shock converted dollars into hegemon-controlled IOUs #exemplifies (0.95) — Yanis Varoufakis, Technofeudalism, 559
• Reformers demand flexible exchange rates and growth-oriented central bank policy #qualifies (0.85)