The Impact of Trump’s tariffs on global trade and the US economy - Donald Mackay

WITH a stroke of his fat koki pen, US President Donald Trump appears to doom the dollar’s reserve status than anything Xi, Putin or anyone else could do. Although his reserve status was an outcome of American strength at Bretton-Woods, the dollar has retained that state because a world really has no alternative. That “exorbitant privilege” of being the world’s reserve currency, described by French economist Valery Giscard d’Estaing, is essential to American economy.

- DONALD MACKAY

The dollar’s role allows the US to keep borrowing dollars, issue debts like ordinary commodities which are widely held globally. Commodities such as gold and even sugar are priced in dollars, further cementing its centrality in global trade.

But these are all fictions, maintaining this ephemeral existence because of the collective belief in the faithful.

In Terry Pratchett’s 1992 philosophical treatise, “Guards! Guards!”, Commander Samuel Vimes came to realise the form of a powerless tortoise because his followers no longer truly believe in him. The tortoise and his followers has become hollow, rotten in fear, rising and dogmatic rather than genuine strength. This loss of authentic belief renders Om barely able to summon up a thunderclap. The United States derives its strength from the belief of its citizens and most of the world, in its institutions, such as democracy, justice, and governance. When that belief in America is difficult to see how America still thrives. Om is eventually caught by an eagle and dropped onto someone’s head, so the metaphor only goes so far, but the point remains.