Replace Dollar as Reserve Currency? - Prof. Stiglitz of Columbia

  • Thread starter edpell
  • Start date
In summary, Prof. Stiglitz of Columbia University believes that the current reserve system is deteriorating, and the dollar is not a reliable store of value due to its low return and high risk. When discussing potential alternatives, gold or a basket of precious metals is suggested, but it is noted that these options cannot offer an expanding money supply as the economy grows. Another suggestion is the peso, as Mexico is seen as a trustworthy source.
  • #1
edpell
282
4
Prof. Stiglitz of Columbia University said:

"The current reserve system is in the process of fraying," the Columbia University economics professor said at a conference in Bankok. "The dollar is not a good store of value. Right now, the dollar is yielding almost no return and yet anybody looking at the dollar has to say there's a high degree of risk."

Any thoughts on what we can use to replace the "fraying" dollar?

Being a Columbia graduate I am fond of the University and its professors. :)
 
Physics news on Phys.org
  • #2
The obvious answer is gold, or a basket of precious metals. Gold is often purchased for its store value.
 
  • #3
Quatloos. :biggrin:
 
  • #4
A high degree of risk compared to what; the Euro?
 
  • #5
jtbell said:
Quatloos. :biggrin:
Did the veins in your head flutter when you typed that?
 
  • #6
Ivan Seeking said:
A high degree of risk compared to what; the Euro?

:rofl:
 
  • #7
calculusrocks said:
The obvious answer is gold, or a basket of precious metals. Gold is often purchased for its store value.
Gold can't offer an expanding money supply as the economy expands.
 
  • #8
mheslep said:
Gold can't offer an expanding money supply as the economy expands.

Gold does offer value, however, when the money supply expands to an absurdity.
 
  • #9
My vote goes to the peso. Mexico's good for the money.
 

1. Why should the dollar be replaced as the reserve currency?

The dollar's status as the global reserve currency has been a source of controversy for many years. Some argue that it gives the United States an unfair advantage in the global economy, as it allows the US to borrow at lower interest rates and print money without facing immediate consequences. Others argue that the dollar's dominance contributes to global economic instability, as any fluctuations in the US economy can have ripple effects around the world.

2. What currency should replace the dollar as the reserve currency?

There is no clear consensus on which currency should replace the dollar as the global reserve currency. Some experts suggest the euro, as it is the second most widely used currency and represents a strong economic force in the European Union. Others argue for a more diversified approach, using a basket of currencies such as the Special Drawing Right (SDR) created by the International Monetary Fund (IMF).

3. What are the benefits of replacing the dollar as the reserve currency?

Replacing the dollar as the reserve currency could have several potential benefits. It could help reduce the US's trade deficit and decrease the risk of a global economic crisis caused by fluctuations in the US economy. It could also promote a more stable global economy by reducing the dominance of one country's currency.

4. What are the potential drawbacks of replacing the dollar as the reserve currency?

Replacing the dollar as the reserve currency could also have negative consequences. It could potentially increase global economic instability if the chosen replacement currency is not as strong or stable as the dollar. It could also lead to increased political tensions between the US and other countries, as the US may view the move as a threat to its global economic power.

5. Is replacing the dollar as the reserve currency a realistic possibility?

Many experts argue that replacing the dollar as the reserve currency is not a realistic possibility in the near future. The dollar's dominance in the global economy is deeply entrenched, and any significant changes would require a major shift in the global economic landscape. Additionally, the US has significant political and economic influence, making it difficult for other countries to challenge the dollar's status as the reserve currency.

Similar threads

Replies
127
Views
16K
Replies
3
Views
1K
  • STEM Academic Advising
Replies
1
Views
1K
Replies
17
Views
3K
  • STEM Career Guidance
Replies
8
Views
2K
  • STEM Academic Advising
Replies
6
Views
1K
Replies
3
Views
931
  • STEM Academic Advising
Replies
9
Views
4K
  • Science and Math Textbooks
Replies
17
Views
7K
  • Biology and Medical
Replies
14
Views
6K
Back
Top