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Currency exchange -> Reserve Currency (USD swap line) Reserve currency comes from US trade + military superpower Also legal regimes ultimately mean nothing w/o force to back them, particularly if you have habitual line-stepping regimes who fancy themselves hegemons
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Feels like there’s a few different things that can underwrite a rules-based order with teeth, besides military power (which includes embargos/blockades) Veto-based legal regimes (UNSC) Currency exchange rates (WB/IMF) Technical-standards based (ITU etc) Refugee policies
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Not really. Other currencies have non-trivial amounts of power, the Euro and Yen have been used to hedge against the dollar. “Reserve currency” is not as strong a concept as people think.
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I’m in over my head on this topic, but doesn’t seem to me that dollar power is absolute, or that US alone determines fate of dollar, let alone on the basis of military power. Sure other entities depend on dollar, but reverse is also true. Interdependence.
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There’s two absolutes: If Japan or EU facing economic crisis, they call the US Fed. If Japan or EU facing security crisis, they call the Pentagon. Yes there is interdependence, but the US would be hurt less and recover quicker. Since 2012, ECB/EU banks subsidiary of US banks
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