Why we speak English and use the US dollar, for now
Given its depth and wide reach, it would take a lot to dethrone the King Dollar even if Washington is run by imbeciles. But sanctioned countries like Iran, which must work around the system, may eventually be seen as pioneers in a post-dollar world
Some patriots in China fantasise a lot about the yuan displacing the greenback as the world’s dominant currency. Other anti-American critics think the US dollar will collapse any day now. I consider myself as patriotic as the next Chinese person, but I am not sure it’s even Beijing’s policy to dethrone the dollar; perhaps it’s a long-term aspiration.
“[The US dollar] is actually extremely hard to dislodge even if the United States policy is crazy,” Krugman said “It’ll take a lot. You think about what it would take for us to start doing international business in Mandarin. That’s not going to happen overnight.”
He raises a fascinating point. English and the US dollar share similar dominance.
Many foreign businesspeople working in China may speak good Mandarin. But they would get by just as well speaking only English as they would be doing business in Mumbai or Frankfurt.
Although my first language is Chinese, I make a living primarily by using the English language. My investment portfolio is practically all in the US dollar and Hong Kong dollar, whose value is pegged to the greenback. The currency link effectively makes the US Federal Reserve Hong Kong’s real central bank.