Mark Moss argues the dollar can dominate globally while losing purchasing power at home. America's "exorbitant privilege" lets the U.S. borrow cheaper than anyone else, giving Washington room to print money without losing reserve currency status.
This is where most people get the dollar story completely backwards, right? They think the dollar, it either has to remain dominant and strong or it collapses and dies. Like, it's either or. But what does collapse even mean, right? Because the dollar can become more dominant, it can continue to be a more dominant global network, but can also collapse in purchasing power at the same time. Actually, in fact, the greater its dominance, the more room Washington has to accelerate the debasement. Let me show you how. Economists sometimes call the dollar's reserve currency status America's exorbitant privilege. So the world needs dollars for trade, right? They need it for savings, collateral, debt payments, things like that. They need it for— they need it for international settlement. That demand allows the United States to borrow more at lower rates than it could get from anybody else.
