Professional Documents
Culture Documents
The Global Currency Power of the US Dollar : Problems and Prospects 1st Edition Anthony Elson full chapter instant download
The Global Currency Power of the US Dollar : Problems and Prospects 1st Edition Anthony Elson full chapter instant download
https://ebookmass.com/product/scientism-prospects-and-problems-
de-ridder/
https://ebookmass.com/product/bucking-the-buck-us-financial-
sanctions-and-the-international-backlash-against-the-dollar-
daniel-mcdowell/
https://ebookmass.com/product/bucking-the-buck-us-financial-
sanctions-and-the-international-backlash-against-the-dollar-
daniel-mcdowell-2/
https://ebookmass.com/product/global-problems-and-the-culture-of-
capitalism-6th-edition-ebook-pdf/
Demise of the Dollar Addison Wiggin
https://ebookmass.com/product/demise-of-the-dollar-addison-
wiggin/
https://ebookmass.com/product/the-rise-of-english-global-
politics-and-the-power-of-language-rosemary-salomone/
https://ebookmass.com/product/naval-modernisation-in-southeast-
asia-problems-and-prospects-for-small-and-medium-navies-1st-
edition-geoffrey-till/
https://ebookmass.com/product/europes-century-of-crises-under-
dollar-hegemony-a-dialogue-on-the-global-tyranny-of-unsound-
money-1st-ed-edition-brendan-brown/
https://ebookmass.com/product/regionalizing-global-climate-
variations-a-study-of-the-southeastern-us-regional-climate-1st-
edition-vasubandhu-misra/
Anthony Elson
The Global
Currency Power
of the US Dollar
Problems and Prospects
The Global Currency Power of the US Dollar
Anthony Elson
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer
Nature Switzerland AG 2021
This work is subject to copyright. All rights are solely and exclusively licensed by the
Publisher, whether the whole or part of the material is concerned, specifically the rights
of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfilms or in any other physical way, and transmission or information storage and
retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology
now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc.
in this publication does not imply, even in the absence of a specific statement, that such
names are exempt from the relevant protective laws and regulations and therefore free for
general use.
The publisher, the authors and the editors are safe to assume that the advice and informa-
tion in this book are believed to be true and accurate at the date of publication. Neither
the publisher nor the authors or the editors give a warranty, expressed or implied, with
respect to the material contained herein or for any errors or omissions that may have been
made. The publisher remains neutral with regard to jurisdictional claims in published maps
and institutional affiliations.
This Palgrave Macmillan imprint is published by the registered company Springer Nature
Switzerland AG
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
To Queenie
vii
viii PREFACE
ix
Contents
Index 199
xi
Glossary
xiii
xiv GLOSSARY
xv
CHAPTER 1
reserves, but the dollar is by far the most important one. At the end of
2020, the dollar accounted for nearly 60% of global reserves reported
to the IMF, compared with 21% for the euro, 6% for the Japanese yen,
4.7% for the British pound and 2.2% for the Chinese renminbi.1 The
dollar also dominated these other currencies in terms of its share of
global payments, the international banking positions, international debt
securities and foreign exchange transactions, as reported in Table 1.1.
This book attempts to explain how the US dollar has become the
dominant currency of the global economic and financial system. It also
examines the various dimensions of the global currency power of the US
dollar and assesses its benefits and costs for the stability of that system.
These costs have risen in recent years, while the United States’ tradi-
tional hegemonic role in maintaining the stability of the system has been
weakened. In this light, the book considers various arrangements that
could replace it, in the context of a reform of the international monetary
system, in which the US dollar has played a central role throughout the
post-World War II (WW2) era.
For purposes of this book, the international monetary system is defined
to cover (a) the rules and procedures for the exchange rate arrangements
that individual countries maintain for their cross-border trade and finan-
cial transactions; (b) the role of reserve currencies held by central banks
for their operations; and (c) the work of the International Monetary Fund
(IMF), which is the central inter-governmental organization charged
with oversight of the system. The global financial system includes the
international monetary system, as well as international financial transac-
tions involving equity, debt and direct investment, portfolio management,
1 THE US DOLLAR AS A GLOBAL CURRENCY 3
and the borrowing and lending of banks and non-banks. These trans-
actions would not be possible without the architecture provided by the
international monetary system.
The economic effects of the current Covid-19 crisis have highlighted
the dominant currency role of the US dollar, as well as the potential
problems that could arise in the future. Accordingly, the contents of this
book should be seen as directly relevant to post-crisis international policy
debate. Some of the concerns about the dollar’s role in the international
monetary system discussed in this book were also raised in the wake of
the global financial crisis of 2008–2009, but they were not pursued at the
official level in the years following that crisis because of the intense focus
of the advanced countries on global economic recovery and a reform of
international financial regulation. However, since that crisis, much more
has been learned about the global dollar system and the risks and defects
associated with what is a largely unregulated system of dollar liquidity and
credit, which are reflected in this book.
recent example of how that power has been expressed is the frequent
use of financial sanctions by the US government. These sanctions typi-
cally involve restrictions on access by foreign governments, business firms
and/or individuals to the international payments system that is based
largely on the US dollar and operates mainly through global American
banks.
In linking the global currency power of the dollar to the dominant
role of the United States in the global system, one must also recognize
the hegemonic role that the United States has played in promoting the
stability of the international financial system by means of its efforts to
maintain a sound macroeconomic policy and a strong regulatory frame-
work for its domestic financial system, as well as its leadership role in a
number of international organizations (such as the IMF and World Bank)
and policy groups (such as the G7 and G20). These institutions and
groups were created to sustain the liberal international economic order
that emerged in the early post-WW2 years.
More specifically, the global currency power of the dollar would not
exist without its links to the domestic capital markets of the United States,
which are unparalleled for their breadth and depth and freedom of access
for non-residents, in particular for the purchase and sale of US govern-
ment securities that function as the primary “safe haven” asset for public
and private investors throughout the global financial system. The global
currency power of the dollar is also sustained by the strong rule of law
and the protection of property rights that exists in the United States, as
well as the credibility of its monetary and fiscal policy institutions.
The determinants of the global currency power of the dollar raised
above are discussed in more detail in Chapters 3 and 4.
The recent capital outflows in early 2020 posed a difficult policy choice
to the EMDEs, as would any tightening of monetary policy by the Fed
to a much less dramatic extent, in regard to their inflation-output trade-
off. The capital outflows would lead to pressures for a depreciation of the
currency in the originating country with likely inflationary effects in that
country in the absence of any offsetting monetary policy adjustment by its
central bank. However, any tightening of monetary policy to counteract
these inflationary effects would have an adverse effect on output and the
rate of economic growth of that country. This potential cost to output
is augmented by the dominant role that the dollar plays in the invoicing
and settlement of trade. Under such a system, any depreciation of the
country’s currency vis-à-vis the dollar would mainly increase the cost of
imports without any significant benefit to exporters if they price most
of their traded goods in dollars. The volatility of capital flows has been
a principal motivating factor in the decision of EMDEs to significantly
increase their holdings of foreign reserves as a safeguard or self-insurance
mechanism against sudden stops in capital inflows.
The sharp appreciation of the US dollar associated with the capital
inflows (point “b” above) also occurred in a relatively brief period of time
and represented a significant break from its prior trend. The exchange
rate for the US dollar is the most freely flexible of all exchange rates in
the international monetary system in that the Federal Reserve, acting in
consultation with the US Treasury Department (which has legal respon-
sibility for the government’s exchange rate policy), does not intervene in
foreign exchange markets on a regular basis with a view to influencing the
basic value of the dollar. Such intervention has only occurred on a few
isolated occasions in the past when the US government was concerned
about a significant misalignment of currencies among its major trading
partners and agreed with them on a joint pattern of intervention to
bring about an adjustment in relative currency values. As in the case of
capital flows, exchange rates for these countries are subject to a significant
degree of volatility, which is another hallmark of the international mone-
tary system. This degree of risk in currency trading is normally minimized
by means of swaps and futures trading, but it is also one factor that has
fostered the expansion of a global dollar system where such risk would be
absent.
The conversion of dollar and non-dollar assets held abroad into US
government securities traded in financial markets of the United States
(point “c” above) reflects two other important features of the global
8 A. ELSON
dollar system. One is the unfettered access by foreign official and private
operators to the financial markets of the United States, which are free of
capital controls for legitimate international financial transactions and are
unmatched in terms of their breadth, depth and liquidity. According to
the McKinsey Global Institute, the value of assets and liabilities recorded
in the financial markets of the United States (mainly located in New York
City) are more than two times larger than that of the next two largest
global financial centers (London and Luxembourg).
The other important feature of financial transactions taking place in the
United States is the role that US government securities play as a global
“safe” asset for both private and public agents and institutions abroad. A
“safe” asset is one that is held for temporary investment or precautionary
purposes and can be converted into liquid form quickly, with little or no
change in value. A number of different assets may satisfy these criteria to
varying degrees, but US government debt securities have been preemi-
nent in that they are the most widely held and pursued in times of crisis.
This judgement of safety reflects widespread confidence among market
participants in the debt management capacity and commitment of the
United States to a sound fiscal position. As a result, around 40% of all
debt securities issued by the US government were held by non-residents
prior to the Covid pandemic. This confidence in the safety of US govern-
ment debt has been translated into a lower interest cost (which can be
called a liquidity premium or convenience yield) than that paid by other
governments on their debt, as well as a significant spread in favor of the
United States with respect to the yield that it earns on its investments
and assets held abroad. The size and openness of US financial markets
and the special role of US government securities as a global safe asset are
two factors that have promoted the widespread use of the dollar in the
valuation of global debt securities and capital flows.
The final important feature of the international financial flows associ-
ated with the two crises (point “d” above) is the extraordinary role played
by the Federal Reserve (the Fed) as an unofficial, international lender of
last resort. Early on in both crises, the Fed activated a swap network or
a set of reciprocal credit arrangements with 14 other central banks from
selected advanced and emerging market countries as a direct response to
funding problems that arose within the global dollar system. In certain
cases, foreign banks that had raised dollar financing on a short-term basis
in the United States for credit operations abroad encountered difficulties
in rolling over these liabilities as the holders of these claims sought safer
Another random document with
no related content on Scribd:
precautions the losses which formerly proved so heavy may entirely
be prevented.
“TREMBLING,” OR LUMBAR PRURIGO, IN
SHEEP.
The above term is applied to a disease peculiar to sheep, and
characterised by neuro-muscular disturbance, which always ends
fatally after a longer or shorter period.
Symptoms. Clinically the disease occurs in two forms, one
termed the convulsive form, the other the pruriginous form. In the
convulsive form the patients rapidly lose appetite, soon appear
unable to stand, fall on their sides, and exhibit spasmodic
contractions of certain groups of muscles. After a time the clonic
contractions may give place to persistent rigidity. The patients are
carried off rapidly in a week or two without other important
symptoms. This disease appears to exhibit certain analogies with
louping-ill, but these do not seem to be recognised in France, where
it chiefly occurs.
In the pruriginous form the beginning of the attack is obscure, and
only the shepherd is able to note anything unusual. The animals
move in a jerky way, the hind limbs being lifted at times after the
manner of a horse suffering from stringhalt. They are excitable,
exhibit trembling movements when touched, with convulsive
movements of the head, and present an anxious and vacant
appearance. The development of these symptoms, which constitute
what may be termed the first phase of the disease, is sometimes
prolonged, and in winter may last from one to two months. In
summer it rarely lasts longer than a week or two.
At this stage a special pathognomonic symptom develops, viz.,
intense and permanent pruritus of the hind quarters, which causes
the animals to rub the croup against any projecting objects, walls,
mangers, etc. They thrust themselves backward against the object,
and rub with such violence that the wool is torn away and the skin
itself often excoriated, although the irritability appears to be in no
wise diminished thereby. In the fold the animals sometimes rub
against one another, making their sides raw, and bite themselves on
the croup, the quarters, and the tail.
When the affected parts are touched with the hand, peculiar
movements of the head and the lips are immediately excited, similar
in character to those caused by mange. Up to this time the animals
continue to feed, but they progressively lose condition, become weak
in the hind quarters, and fail to keep up with the other animals in the
flock. Their gait becomes hesitating; they move with a trotting step
and appear semi-ataxic.
All these symptoms develop without fever, but become aggravated
from day to day, until they end in paraplegia and death. This second
phase lasts for a period of from two to four months in winter.
Lesions. No lesions can be detected on a simple examination of
the dead bodies. Gilbert has mentioned a change in the blood;
Trasbot, chronic inflammation of the pia mater and of the lumbo-
sacral portion of the spinal cord. German writers have described
sclerotic changes in the posterior portions of the cord. Moussu has
carried out a large number of examinations, but has never found
these lesions, either on anatomical or on histological investigation,
and he considers that they are not by any means present in all cases.
Besnoit and Morel, who carried out a very remarkable anatomical
and pathological study of the disease, used Nissl’s staining method,
but only found very discrete changes in the cord (vacuoles in the
motor cells of the anterior horns). They found, however, significant
lesions of neuritis in the peripheral nerves.
Causation. The cause is as yet little understood, and it is difficult
to prove how the forms of neuritis described by Besnoit are brought
about.
The disease was not known in France before the introduction of
Merinos, and former investigators referred it to heredity,
consanguinity, precocity, and even to sexual excitement. German
writers declare that it seems more particularly to attack rams and the
better-bred varieties. In reality, the disease occurs in all flocks, and
in all kinds of sheep indiscriminately; it attacks ewe lambs and young
castrated lambs as well as rams. Moussu is absolutely of this opinion,
and for want of more precise information agrees with Trasbot, and,
he believes, with Besnoit, that the symptoms shown may possibly be
referred to a chronic intoxication.
Diagnosis. The diagnosis is difficult during the early stages, but
when the pruritus becomes manifest there can no longer be room for
doubt.
Cases of paraplegia might perhaps be mistaken for paraplegia due
to cœnurosis, but in the latter case there is no pruritus.
Prognosis. The prognosis is extremely grave, observation having
shown that all the patients die after a longer or shorter time.
Treatment. Until now treatment has proved absolutely useless,
and it would seem the best course to slaughter the animals before
wasting becomes marked.
SECTION VI.
DISEASES OF THE PERITONEUM AND
ABDOMINAL CAVITY.
CHAPTER I.
PERITONITIS.
ACUTE PERITONITIS.
CHRONIC PERITONITIS.
ASCITES.
PERITONEAL CYSTICERCOSIS.
The above name has been given to a parasitic disease caused by the
infestation of young animals, such as calves, lambs and young pigs,
with embryos of the Tænia marginata of the dog.
Symptoms. Peritoneal cysticercosis is often of so mild a
character, and the number of embryos which penetrate the body so
small, that in the majority of cases there are no visible symptoms. It
is not until the meat comes to be dressed by the butcher that little
cysts (Cysticercus tenuicollis) are discovered in the abdominal
cavity.
Unfortunately, in exceptional cases it may also happen that the
number of embryos in the abdominal cavity is so great as to produce
lesions of acute hepatitis, acute peritonitis, and sometimes pleurisy.
These grave forms are more common in young pigs and lambs.
The animals appear dull, feeble, exhausted and without appetite,
but exhibit marked thirst, lose flesh and become anæmic in a few
days. Soon afterwards they show symptoms of acute peritonitis, with
exudation of fluid, and death may follow in a week or two.
In cases where infestation is less marked, the animals may exhibit
only progressive anæmia, without well-developed symptoms of
peritonitis, until death occurs.
Lesions. On post-mortem examination a sero-sanguinolent
exudation is seen, together with more or less numerous false
membranes, and a varying number of young cysticerci floating freely
in the liquid or enclosed in the folds of the mesentery. The cystic
vesicles are spherical, ovoid, or elongated, and translucid or
opalescent. They are some millimètres in diameter, and in some
cases are very numerous, ranging from a few hundreds up to several
thousands, but in others comparatively few.
The liver shows signs of intense hepatitis, caused by embryos
burrowing into its tissue.
Causation. The causes are limited to a single fact, viz., ingestion
of the eggs of Tænia marginata, which are spread over the fields in
the excrement of dogs suffering from that parasite.
Diagnosis. The diagnosis can only be arrived at by a post-mortem
examination, when cysticerci in various stages of development are
discovered.
Prognosis. The prognosis is difficult to indicate, because
everything depends on the intensity of the infestation.
Treatment. No curative treatment is possible, direct action on
the developing parasites being impracticable. Nevertheless, some
patients survive, and after having shown grave general disturbance
may gradually improve.
The only efficacious treatment is of a prophylactic nature, as in
cœnurosis and echinococcosis. Dogs suffering from tæniæ should
periodically be treated and freed from their parasites.
CHAPTER II.
[6]
HERNIÆ.
6. For a fuller description of herniæ and their treatment, see Möller and
Dollar’s “Regional Surgery,” pp. 263–309.
CONGENITAL HERNIÆ.
UMBILICAL HERNIA.
ACQUIRED HERNIÆ.