Can the U.S. dollar stay on top?

The dollar is the world’s reserve currency, the backbone of the globalized economy. Would that remain the case if political instability throws the United States off-balance in an election year? Maybe. “The United States is merrily chipping away at the pillars” that make the dollar so dependable, Paritosh Bansal said at Reuters. Growing attacks on the rule of law in the wake of Donald Trump’s criminal conviction are just one sign that America is “effectively daring the rest of the world to find an alternative” to the dollar. So far, though, no real alternative is emerging.

The “dominance of America’s currency is harder than ever to overturn,” Eswar Prasad said at Foreign Affairs. Other countries don’t like that financial power, “which exposes their economies and financial systems to the vagaries of U.S. policies.” And America’s economy is “no longer the colossus it once was,” undermined by high debt and “erratic” political decision-making. That should make the dollar weaker. Instead, the “gap between it and any putative rival has only grown and shows no signs of stopping.”