Our Dollar, Your Problem: An Insider's View of Seven Turbulent Decades of Global Finanace, and the Road Ahead, Rogoff - Inc.

              The US dollar has been the world's "dominant currency" for over a century.  This position of dominance is seen in the pricing of commodities, international bonds, and just about all world-wide shipping. It has provided a meaningful boost to the US's wealth and security. Many economists thought the Soviets would challenge the US's primacy, but they obviously failed. Japan and the yen seemed assured of passing the US in the 1980's as their export driven economy boomed. In 1985, the US and Europe "bludgeoned Japan" to raise the value of the yen. The ensuing exchange rate appreciation, along with a declining birth rate, and the growth of other Asian economies led to a financial crisis asset bubble and recession that Japan has not recovered from in three decades. The unification of the European currencies was "the most remarkable example of regional macroeconomic policy coordination in modern history." In hindsight, it appears to have put a damper on growth, and although the Euro still has potential, it only prices trade within the EU. The four decade rise of China has changed the world, and will continue to do so for decades. At the moment, many see the remnibi as a bona-fide challenger to the dollar. Nonetheless, China is struggling in its quest to overtake the US because of a 'baby bust' and more importantly, a potential housing/real estate bubble. Just about all post-war financial crises have been caused by a housing bubble that eventually led to a recession. 

                 Over the years the dollar's endurance is attributable to the strength of the American economic system and the Federal Reserve's ability to act independently. Luck has also been a factor, as a great many of our competitors have made mistakes. For example, the Euro might be competitive had not France insisted on including Greece in the union.  The greatest danger to the dollars supremacy is, of course, internal. Our rising debt cannot be sustained, and will lead to inflation and financial crises around the world. "If runaway US debt policy continues to crash up against higher real interest rates and geopolitical instability, and if the political pressures constrain the Federal Reserve's ability to consistently tame inflation, it will be everyone's problem."

              I couldn't even read half the book, as the 'Dismal Science' is particularly dismal here. That said, I have read Rogoff in the paast and find him interesting and insightful. Since I agree that our cascading debt is a massive threat to the our prosperity, I think this is genius.