, Columnist
How the U.S. Has Weaponized the Dollar
The currency’s “exorbitant privilege” gives the nation extraordinary leverage.
The Mount Washington Hotel, Bretton Woods: Where it all began.
Photographer: Education Images/Universal Images Group EditorialThis article is for subscribers only.
Convinced of an existential threat from competitors, America is weaponizing the dollar to preserve its global economic and geopolitical position.
While the U.S. accounts for about 20 percent of the world’s economic output, more than half of all global currency reserves and trade is in dollars. This is the result of the 1944 Bretton Woods agreement, the effect of which was enhanced when the link between the dollar and gold ended in the 1971 Nixon shock, allowing America to control the supply of the currency.