This is a good OpEd that ran in the NY Times yesterday "Why the Dollar Endures" suggesting that the strength of the U.S. Dollar, because of its role as stable world currency ("Central banks around the world hold nearly two-thirds of their foreign-currency reserves in dollar-denominated assets, mostly Treasury securities..."), may be encouraging the USA to allow its national debt to rise to an excessively high debt-to-GDP ratio point, now near or at 100% of GDP. For most countries such a debt-to-GDP ratio would be unthinkable.
This article made me think of the USA's enormous trade deficit of about $360 billion, compared to Germany's trade surplus of $257 billion, according to the CIA World Fact Book. Shouldn't the USA's trade deficit also weaken the dollar? But it hasn't.
The author concludes, "The dollar’s continued prominence is ultimately less a parable about American exceptionalism than about weaknesses in the rest of the world and deep problems in the structure of the global monetary system."
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