Exorbitant Privilege the unique property of the usd.
The French under de Gaulle began demanding gold instead of usd in the 1960s.
They argued that France had to provide treasure in return for a piece of worthless paper. That there was no restrictions on the paper used to print the usd.
The need to issue bonds though does act as a constraint. MMT bypasses the need for bonds by just printing usd.
"The goal was to replace the gold standard, which had collapsed during the Depression, with something more flexible. In practice, however, the system afforded the greatest flexibility to the United States, which enjoyed substantial freedom to pursue its domestic policy objectives as well as the ability to run sustained balance-of-payments deficits. The latter, according to French finance minister Valéry Giscard d’Estaing, gave the United States an “exorbitant privilege.” The Bretton Woods system ultimately broke down in part because the U.S., as the “anchor” country, didn’t live up to its obligation to maintain price stability. Since the early 1970’s the international monetary system has been effectively decentralized, with each country setting its own exchange-rate framework and with the values of the major currencies being determined by markets (“floating” rather than fixed exchanged rates). "
This author is playing down the role of the usd but it still possesses its exorbitant privilege.
"As American economistBarry Eichengreensummarized: "It costs only a few cents for the Bureau of Engraving and Printing to produce a $100 bill, but other countries had to pony up $100 of actual goods in order to obtain one."[2]In February 1965, PresidentCharles de Gaulleannounced his intention to exchange its U.S. dollar reserves for gold at the official exchange rate. He sent the French Navy across the Atlantic to pick up the French reserve of gold and was followed by several countries. As it resulted in considerably reducing U.S. gold stock and U.S. economic influence, it led U.S. PresidentRichard Nixonto end unilaterally the convertibility of the dollar to gold on August 15, 1971 (the "Nixon Shock"). This was meant to be a temporary measure but the dollar became permanently a floatingfiat moneyand in October 1976, the U.S. government officially changed the definition of the dollar; references to gold were removed from statutes.[3][4] "
It is only a matter of time before the yanks transition to unrestricted usd printing without the need for bonds under the crazy MMT. The world needs to oppose such a move.
