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> Prior to Bretton Woods countries were well aware that no single country could be entrusted with the power granted in being the global reserve currency.

That's a misleading statement. First of all at the beginning of the 20th century the British pound was clearly the global currency - where a lot of the international commerce happened. Then towards the 1930s and later on the Dollar took over that role. But that role carried much less weight back then - globalization was still in its infancy and a "global reserve currency" as we understand it today simply didn't exist back then. Right now some Dutch pensioners money is invested in American, Canadian, Australian, German, etc. companies. And the parts for most consumer goods are coming from all over the world. Pre Bretton Woods basically none of this existed. This global financial system we speak of today is unprecedented and only exists since the late 70s - where most countries abandoned their currency controls (apart from the US and CH which never really had them).

by somenameforme2 hours ago|

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I agree that speaking of a global reserve currency is putting the cart before the horse, but I think the meaning was also clear. It was obvious that the 'foundational' currency within Bretton Woods was going to give its creator something that could be easily weaponized against other countries. And so they sought to make it 'impossible' to do that, but ultimately did so in a naive way - 'Here's all this power - please honor these rules that will punish you if you abuse it.'

by Danox1 hours ago|

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Britain’s downfall was World War I

by KellyCriterion2 hours ago|

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- no currency will dominate....

There is excellent research in "currency diversity", start with Prof B. Lietaer

https://www.youtube.com/watch?v=T9EI2PrDpmw

by nradov3 hours ago|

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No country is accumulating more than token amounts of gold. There just isn't much physical gold available relative to the size of the world economy.

by somenameforme2 hours ago|

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The amount of money in the world is also minuscule relative to the size of the world economy. Such is the nature of widescale financialization that the market capitalization of various financial assets greatly exceeds the amount of money in the world. When you think about it, it sometimes makes you wonder if people will look back at this time with some degree of bemusement. I mean it's easy to understand how, and even why, we ended up here. But it's still a nonsensical place to be nonetheless.

by nradov2 hours ago|

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Your comment makes no sense. There's no need for a larger money supply. The current situation is sensible (at least to anyone who understands basic finance).

by somenameforme1 hours ago|

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I'm not saying there's need for a larger monetary supply. I'm saying that the world economy's 'value' is heavily driven by financialization, which is increasingly disconnected from reality, even more so as governments have gradually descended to 'stock market = economy' which leads directly to Goodhart's Law, and will eventually culminate in a 'correction.'

So for instance yeah the US only has about 1PE (Peak Elon) of gold, but the entire global level of US reserves are only about 5PE!

by nradov45 minutes ago|

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So what. The amount of physical gold held by the USA (or any other country) is almost entirely irrelevant to the real economy. It's a pointless relic of the past. We could sell off all of our gold so that people could make jewelry out of it and nothing would change.

by david9273 hours ago|

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This is exactly my take. Except I think there was never an interest by China to make the yuan the new global reserve currency but instead slow walk it back to a gold standard, and that's what has been happening since 2008.

If a single country's currency is the global reserve currency, all you're finding out is whose thumb you're under.